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Volkswagen Group said in an announcement on Thursday that the continued pandemic of novel coronavirus had a significant impact on the group's business, with the car sales network almost stagnant, customer demand falling sharply and supply cuts in the parts supply chain. As the trend of the epidemic is still uncertain, combined with falling profits, lower revenue, reduced cash flow and other factors, Volkswagen believes that 2020 expectations can no longer be achieved, and decided to withdraw its previously released 2020 outlook.

According to the Volkswagen Group's financial report, sales revenue in 2019 was 252.6 billion euros (1.9468 trillion yuan), an increase of 7.1 percent over the same period last year, and operating profit was 17 billion euros (131 billion yuan), an increase of 21.8 percent over the same period last year. Operating profit excluding special project expenses was 19.3 billion euros (148.7 billion yuan), an increase of 12.8 percent. Due to the increase in all kinds of data, Volkswagen Group CEO Dis said at the press conference that "Volkswagen delivery volume in 2020 will be the same as in 2019, sales revenue will increase by 4%, and the return on operating sales will be between 6.5% and 7.5%. Net cash flow will continue to grow positively." However, due to the impact of the epidemic, Volkswagen announced the suspension of production at a number of factories, which in turn affected car sales and performance throughout the year. Deiss's "bold words" may not be realized.

According to previous results released by Volkswagen, operating revenue in the first quarter of this year was about 55 billion euros (422.873 billion yuan), down 8 percent from 60 billion euros (461.316 billion yuan) in the same period last year. Operating profit was 900 million euros (6.92 billion yuan), down 76.9 percent from 3.9 billion euros (29.986 billion yuan) in 2019. The profit margin on sales is about 1.6%, a far cry from the previous target of 7.5%; the net cash flow of cars is-2.5 billion euros (19.222 billion yuan).

In April, Volkswagen Group's production and sales in the Chinese market have gradually got rid of the impact of the epidemic. At present, the production capacity of the Volkswagen brand in the Chinese market has returned to 70% of its pre-epidemic level, more than 2000 dealers have resumed operations, and plans for new cars such as the eighth generation Golf and Viloran are also under way. Production and sales are stagnant in several car markets outside China, which is expected to cost 2 billion euros (15.806 billion yuan) a week.

However, Volkswagen said it would resume production at its plants in Zvico in Germany and Bratislava in Slovakia as soon as April 20. Factories in Russia, Spain, Portugal and the United States will begin to increase production on April 27, while factories in South Africa, Argentina, Brazil and Mexico will start in May.

At present, the situation of Volkswagen Group is not optimistic, as the impact of the epidemic on demand, supply chain and production is still unpredictable, the group does not know when it will be able to make a new outlook for the whole year.

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