Volkswagen Faces Decline in Profits but Less Than Feared

In early afternoon trading, they were already up 2.7 per cent at 166.4 euros. Pilot shareholder Porsche Automobile Holding SE, holding 31.4 per cent of Volkswagen and 53.1 per cent of the group’s voting rights, stated that there’s a possibility of much significant rise in profit after 2020 taxes.

Volkswagen states on Friday report that it’s 2020 profit were cut to half during the pandemic situation but rebounds from car sale in china and in the fourth quarter kept the largest carmaker all back in black. The automobile group also added that their full-year operating profit, exclusive of diesel emission scandal costs, came in at $12.2 billion, which was $19.3 billion in 2019.

According to Refinitiv, Eikon data Analysts expected a 2020 operating profit settling around 4.8 billion euros. The German group stated that the net currency flow at its automotive division was about 6 Billion euros and car delivery picked at end of the year. It said that the deliveries to the customers of the Volkswagen Group continued to recover strongly in the fourth quarter and even exceeded the deliveries of the third quarter of 2020. Full-year performance caps a turbulent 2020 for Volkswagen and the auto industry. As the pandemic kicked in there was a loss in the second quarter before the automobile company pulled back itself to making profits in the third quarter on the edge of a sudden increment in the luxury car demand around china.

Volkswagen’s shares managed to hit the highest value level in the past 11 months after the total earnings made on Friday release. In early afternoon trading, they were already up 2.7 per cent at 166.4 euros. Pilot shareholder Porsche Automobile Holding SE, holding 31.4 per cent of Volkswagen and 53.1 per cent of the group’s voting rights, stated that there’s a possibility of much significant rise in profit after 2020 taxes. Jefferies analyst stated that the magnitude of the beat is Welcome and supportive of upcoming Full-year results across the industry. European Automobile Manufacturer’s Association data highlighted that while the registrations or new cars dropped down by 4 per cent in Europe in the same period, the Volkswagen sales showed a rise of 1.7 per cent in December.

Volkswagen and its rivals are facing pandemic consequences as of now too, inclusive of a worldwide shortage of chips for production and ongoing shutdowns all amongst the market to fight the outbreak, resulting 2021 be a critical and tough year considering the industrial perspective. Carmakers are also facing challenges in electric and autopilot car production. Fiat Chrysler and Peugeot coming together to create world’s fourth-biggest automaker Stellantis puts more pressure on existing competitors. On missing EU targets on carbon dioxide emission from vehicles produced by Volkswagen, last year made them face a fine of more than 100 million euros, stated Volkswagen. The Volkswagen Automobile group is to release detailed 2020 figures by March 16.