VW car sales, profits plunge during coronavirus crisis

Volkswagen says car sales and operating earnings plunged during the first quarter but that it has plenty of cash to weather the storm

Global sales fell 23% to 2 million vehicles in the first three months of the year, from 2.6 million in the year-earlier quarter, the company said Wednesday. Operating earnings excluding financial items such as interest and taxes shrank by 81% to 0.9 billion euros from 4.8 billion euros ($5.2 billion) a year earlier.

The company said Wednesday that despite the disruption from the virus it remained financially strong with what it termed a “robust” cash pile of 17.8 billion euros ($19 billion). Sales revenue fell by 8.3% to 55.1 billion euros.

Chief Financial Officer Frank Witter said in a statement that “the global COVID-19 pandemic substantially impacted our business in the first quarter. We’ve taken numerous countermeasures to cut costs and ensure liquidity and we continue to be robustly positioned financially. The Volkswagen Group is steering through this unprecedented crisis with focus and determination.”

There were a few bright spots, such as the company's high-end Porsche division seeing an increase in sales revenue due a higher share of more profitable models in the sales mix, though earnings at the division declined to 529 million euros from 829 million euros.

Volkswagen said the group as a whole would make an operating profit for the year but that earnings would be “severely below” last year's.

Besides Volkswagen, the company brands include Audi, Porsche, SEAT, Skoda and Lamborghini.

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