Volkswagen brand recovers from Covid-19 slump in third quarter and confirms outlook
- Third-quarter deliveries almost on a level with previous year; year-to-date decline of 18.6 percent
- Sales revenue of EUR 47.2 billion in the first nine months; rate of year-on-year decline has narrowed to –27.9 percent after three quarters
- Return to profitable territory in third quarter, nine-month operating result before special items of EUR –1.0 billion
- Measures to counter the Covid-19 pandemic showing results; model initiative provides added momentum
After the pandemic-related slump in the first half of the year, business performance at the Volkswagen Passenger Cars brand recovered noticeably in the period from July to September. With 1.5 million vehicles delivered worldwide, the core brand of the Volkswagen Group delivered almost as many vehicles to customers in the third quarter of 2020 as in the prior-year period (– 2.7 percent). In the period from January to September, however, deliveries still decreased by 18.6 percent. The gradual recovery is also reflected in the brand’s financial key performance indicators: Sales revenue amounted to EUR 47.2 billion after nine months, down 27.9 percent on the previous year. After the first six months of the year, a 35.3 percent drop had been recorded. With an operating result before special items of EUR 522 million, the brand was back in positive territory in the third quarter. The nine-month operating result before special items improved accordingly to EUR –1.0 billion (first six months: EUR –1.5 billion).
Alexander Seitz, CFO of the Volkswagen brand: “Despite the ongoing challenges from the Covid-19 pandemic, the brand returned to profitability in the third quarter. This is above all due to the systematic measures taken to cut costs and secure liquidity and the dedicated efforts of our employees, who gave their all to catch up on the backlog following the temporary shutdown in spring. Thanks to our strong product substance, we are gaining market share in many regions. In the final quarter, we are doing everything in our power to get the brand’s full-year operating result into positive territory.”
Gradual recovery of business continues
The gradual recovery in delivery figures after the significant falls at the beginning of the year continued in the course of the third quarter. While the Volkswagen Passenger Cars brand recorded single-digit percentage declines in July and August compared with the prior-year months, in September the brand was already almost at the previous year’s level, at–0.7 percent. The drivers of the gradual improvement in sales are inparticular the new compact electric vehicle, the ID.31, of which around20,000 units have already been delivered, as well as the brand’s plug-inhybrids, which are in high demand, and the significant pick-up in demandfor the Golf 8.
Continuation of effective countermeasures
Despite signs of a recovery, the further development of the Covid-19pandemic remains difficult to forecast. The brand will therefore continuethe strict cost management measures it has initiated. In this way, itsuccessfully reduced fixed costs in the first nine months compared withthe prior-year period. For 2020 as a whole, the brand still anticipatesdeliveries and sales revenue to be significantly below the prior-year level.The operating result before special items is expected to be severely lowerthan in 2019, but still positive.
Electric mobility offensive continues in fourth quarter
Following the market introduction of the all-electric ID.3 in September, theVolkswagen brand will continue to roll out its successfully launched eoffensivein the fourth quarter. Customers can already place orders for theID.42, the second model to be based on the Modular Electric Drive Matrix(MEB). Being an all-electric SUV, the ID.4 has been designed as a world car,which is to be built and sold in all key regions of the world – Europe, NorthAmerica, China. In addition, the brand is driving the electrification of itsportfolio by launching a significant number of plug-in hybrids: PHEVversions of the new Golf and the Touareg can already be ordered.Electrified derivatives of the new Tiguan3 as well as the new Arteon3 andArteon Shooting Brake3 will follow shortly. In addition, PHEV versions ofthe Passat4 and Passat Variant5 have also been available for a while now.
1) ID.3: power consumption in kWh/100 km: 15.4-13.5 (combined); CO2 emissionsin g/km: 0; efficiency class: A+
2) ID.4: power consumption in kWh/100 km: 16.9-16.2 (combined); CO2 emissionsin g/km: 0; efficiency class: A+
3) PHEV version of the vehicle is not yet offered for sale in Europe
4) Passat GTE: fuel consumption l/100 km: combined 1.5-1.4; power consumption,kWh/100 km: combined 14.2-13.8; CO2 emissions, g/km: combined 34-32; efficiencyclass: A+