AutoBeta(AutoBeta.net)03/17 Report--

According to relevant media reports, Volkswagen Group held its 2020 online media communication meeting on the afternoon of March 17. At the meeting, Volkswagen not only commented on 2019 and responded to the current novel coronavirus epidemic, but also said that the company has sufficient cash flow and is still well prepared for the future.

The company performed strongly in 2019

According to financial data previously released by Volkswagen Group, 2019 achieved cumulative revenue of 252.6 billion euros, an increase of 7.1 percent over the same period last year. Of this total, operating profit was 17 billion euros, up 21.8 percent over the same period last year; operating profit excluding special project expenses was 19.3 billion euros, an increase of 12.8 percent over the same period last year. Although the fines and expenses spent on the settlement "emission gate" totaled 2.3 billion euros, the profits are still considerable.

To that end, Dr. Deiss said 2019 was a very successful year for Volkswagen. Because in 2019, business in the global auto industry fell by 4 per cent, leaving the global car market below 80 million for the first time since 2011, but Volkswagen still hit a new high in profits.

In terms of Volkswagen Group's overall sales, the group's global sales reached 10.9746 million vehicles in 2019, an increase of 1.3% over the same period last year, not only setting a new high, but also becoming the world's highest-selling car company. Among them, the Chinese market grew slightly by 0.6% compared with the same period last year, with overall sales reaching 4.2336 million vehicles, accounting for 38.6% of Volkswagen's global sales.

If only Volkswagen brands are counted, global sales of Volkswagen brands have only slightly increased by 0.5% to 627.83 vehicles, which is less than the 1.7% growth of Volkswagen brands in China. As a result, the market share of Volkswagen brands in China has increased to 50.38% of Volkswagen Group in 2019. This is the main reason why Dr. Deiss has been bullish on the Chinese market.

Temporary suspension of production is only to alleviate the impact of the epidemic.

Although Volkswagen performed very well in 2019, global auto companies were affected by the novel coronavirus epidemic in 2020, and Volkswagen is no exception. As a result, Volkswagen sold only 546300 vehicles worldwide in February, down about 24.59% from a year earlier. Among them, sales in China were only 60900 in February, down 74% from a year earlier, suffering an unprecedented decline.

Volkswagen Group said its global sales fell sharply in February, mainly due to a sharp drop in sales in China.

However, as the global region has been affected by the continued spread of the novel coronavirus epidemic to many regions of the world, Europe has become the new center of novel coronavirus's epidemic, and it is also spreading in the United States, causing a number of car companies in Europe to stop production.

Therefore, at today's press conference, Dr. Deiss also revealed: "Volkswagen Group is considering the suspension of production in Europe, which may last for 2-3 weeks because of supply disruptions."

Dees said that the main purpose of the shutdown is to slow the spread of the virus. "the closing time should be very well grasped, neither too early nor too late." At present, some Italian factories have been closed, even for several weeks, and some major factories in Spain have stopped production.

However, referring to the Chinese market, Deiss said: "I am quite optimistic about China." We expect sales to recover for the rest of the year because almost all Volkswagen factories in China are operating and sales are picking up. " "We still think this year could be a good year in China."

Sufficient cash flow can achieve stable development.

According to Frank Witter, a member of Volkswagen's management board and head of finance and IT, "Volkswagen achieved a higher-than-expected 1.7% growth in 2019, so there has also been a significant increase in cash flow, which also shows that we are well prepared for future investment."

Dr. Deiss also uses his Bentley to introduce Bentley, which once lost money in a row, has also improved a lot and turned a profit.

In 2019, Volkswagen spent a total of 1.1 billion euros on the research and development of electric vehicles with energy conservation and emission reduction and automobile digitization, which is also becoming a good combination effect for Volkswagen and has the ability to help Volkswagen achieve higher profits and sales this year. Because the cost of electric cars is lower than fuel models.

And it was earlier revealed by the media that the delivery of ID.3, the first model of the ID series, would be delayed due to software problems. Volkswagen also denied it last week and announced that the first batch of about 30, 000 ID.3 would be delivered in the summer of 2020.

According to Deiss, Volkswagen Group will launch 15 all-electric models and 18 hybrid models in 2020 and 2021.

Volkswagen has not yet predicted novel coronavirus's influence. "novel coronavirus's global spread has affected the global economy, and the extent of the impact of the epidemic on Volkswagen is uncertain, so reliable predictions cannot be made," said Frank Witter, chief financial officer.

However, 2020 must be a very difficult year, and novel coronavirus will also bring more unknown challenges to Volkswagen, including operational and financial, whether for Volkswagen Group or other automakers.

Carmakers are dealing with a "sharp drop in global demand" as workers in China, Europe and the US are quarantined, according to a report by foreign analysts.

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