Volkswagen Group posts loss of €1.4 billion in first half

Worldwide
Published:  12 August, 2020
Volkswagen Arteon

The Germany headquartered automotive Group said its businesses were strongly affected by the Covid-19 pandemic in the first half of the year. Meanwhile, the Volkswagen brand has officially inaugurated a vehicle assembly facility in Accra, Ghana.

Overall, Volkswagen Group deliveries fell 27.4%, year-on-year, to 3.9 million vehicles in the first half of 2020, resulting in a 23.2% decrease in sales revenue to €96.1 billion and operating result before special items amounting to a negative €0.8 billion. Special items relating to the diesel issue are said to have weighed on the operating profit with -€0.7 billion. The Group posted a net loss of €1.4 billion in the period, compared with a €9.6 billion profit in the first half of 2019.

Between January and June, sales at the Volkswagen Passenger Cars brand totalled 1.1 million vehicles, down 39.8% year-on-year. Audi brand sales fell to 416,000 units compared with 632,000 units sold in the comparative period of 2019, down about 34.17%. Sales at the Skoda brand totalled 372,000 units (-33.6%), while Porsche recorded global sales of 116,000 vehicles in the first six months of 2020, down 14.8% year-on-year. Unit sales by the Bentley brand stood at 4,569 units, compared with 4,670 vehicles in the first half of 2019.

“The first half of 2020 was one of the most challenging in the history of our company due to the Covid-19 pandemic”, said Frank Witter, member of the Group Board of Management responsible for Finance and IT. “We introduced comprehensive measures aimed at reducing costs and securing liquidity early on, which enabled us to limit the impact of the pandemic on our business to a certain degree. Thanks to the great team effort, we have gradually been able to ramp up operations within the Group and up until now, have steadily managed to navigate through this unprecedented crisis. Due to the positive trend exhibited in our business over the past few weeks and the introduction of numerous attractive models, we look cautiously optimistic to the second half of the year”, he added.

In early August, the Volkswagen brand announced the official opening of a vehicle assembly facility in Accra, Ghana, which becomes the fifth Volkswagen vehicle assembly location in Sub-Saharan Africa; the other locations are in South Africa, Kenya, Nigeria and Rwanda. The official opening of the vehicle assembly facility is the realisation of the Memorandum of Understanding (MoU) which the company signed with the Government of Ghana in the presence of the German Chancellor, Angela Merkel, nearly two years ago. As a 100% subsidiary, Volkswagen Ghana will be responsible for the import of the SKD kits and Fully Built Units (FBU). “Volkswagen is strengthening the regions and focusing on new up-and-coming markets as part of its Transform 2025+ brand strategy. The Sub-Saharan region plays an increasingly important role. Although the African automotive market is comparatively small today, the Sub-Saharan region has the potential to become an automotive growth market of the future”, said the company in a statement.