Yahoo Finance Volkswagen posts Q1 sales slump, ditches 2020 forecast
The Volkswagen Group (VOW3.DE) reported on Friday that sales for the first quarter shrunk by 23% from the same time period last year to two million vehicles.
Sales in the month of March took a 37.6% nosedive overall, as demand shrivelled, plants and dealerships were shuttered as part of coronavirus lockdowns, the world’s biggest carmaker said.
Sales in the group, which includes Porsche, Audi, and Seat, fell by nearly 45% in Western Europe and 42% in North America last month, from March 2019. Sales in China were down 35%. However, Volkswagen has said is expecting that important market to start picking up again, as the majority of its Chinese plants are back online again.
Volkswagen announced Thursday (16 April) that it was ditching its 2020 forecast, saying it “can no longer be achieved” due to the difficulty of assessing the impact of the pandemic on supply chains, sales, and demand.
READ MORE: Carmakers slowly reboot plants in Europe after COVID-19 shutdown
“The ongoing COVID-19 pandemic has also had a significant impact on Volkswagen Group’s business,” VW said in a statement. “As a result, the automobile retail network has largely came to a standstill. The resulting decline in customer demand and supplier bottlenecks led to production stops within the Volkswagen Group.”
Volkswagen, like most other global carmakers, had to shut down it plants in the middle of March. Many of the companies are eyeing a slow, staggered return to production from next week onwards in Europe.
The company said it expects first-quarter sales revenue to be around €55bn (£47.8bn, $59.5bn). Its operating profit is expected to be €900m, a 81% drop from the same period last year, while its net cash flow plunged to negative €2.5m in the quarter.
The European Automobile Manufacturers Association said today that new car registrations had fallen by 55% in March, compared to the same month last year. New car registrations were down 25% across the European Union in the first quarter.
