Volkswagen China boss sees sales in China on recovery course

FRANKFURT (Reuters) – Volkswagen Group (VOWG_p.DE) said sales of its cars dropped by 23% on the year to 2 million cars in the January to March period but was hopeful on Friday that the Chinese market would recover soon as it moves out of the coronavirus crisis.

FILE PHOTO: Volkswagen logo is seen at the LA Auto Show in Los Angeles, California, U.S., November 20, 2019. REUTERS/Lucy Nicholson

China is VW’s single biggest market accounting for a big chunk of its profits.

Sales reductions due to the virus’s spread in China had slowed in April, the head of Volkswagen’s China business Stephan Woellenstein told reporters on a call.

Referring to the country’s car market overall, Woellenstein said the decline in sales in April was estimated to be between 15% and 20% from a year earlier, while the drop in March, at the height of the pandemic, had been 40%.

“If things continue as they do now, we could have reached last year’s level again in June,” he said. “We see a normalisation with view to the summer.”

Volkswagen’s sales were faring slightly better than the Chinese market as a whole, he said. But any further recovery hinged on whether Beijing implemented economic relief measures.

Reporting its global sales in March, Volkswagen said deliveries were down 37.6% at 623,000 vehicles year-on-year.

This came after the pandemic triggered plant closures and falls in sales as consumers were tied up at home under lockdown measures, and business activity came to a halt, raising fears of a global recession.

In western Europe Volkswagen’s March sales were down 44.6% year-on-year. In central and eastern Europe they were down 23.1%, in North America they were down 42% in North America and in China they were down 35%.

Car sector experts believe declines in April sales worldwide could be steeper overall, as the full impact of lockdowns work their way through the system.

Volkswagen had on Thursday withdrew its outlook for 2020 due to the uncertainty related to the virus, which caused operating profit to drop 81% in the first quarter.

Reporting by Jan Schwartz and Vera Eckert; Editing by Michelle Martin and David Holmes

Source Article

Next Post

Coronavirus: Amazon's investment in Deliveroo gets go-ahead | Business News

The competition watchdog has cleared Amazon’s investment in Deliveroo after the UK company’s faced collapse because of coronavirus. The Competition and Markets Authority (CMA) had been concerned the deal could damage competition by discouraging Amazon from re-entering the online restaurant food market and further developing its presence in the convenience […]