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March 18, 2020

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Chinese business improving for VW

German automaker Volkswagen said its prospects are improving in China, although the spread of COVID-19 makes it impossible to provide an outlook for its global performance in 2020.

In February, the company’s sales dropped 74 percent year on year to 60,900 units in China. For the first two months of 2020, sales of Volkswagen vehicles declined 35 percent year on year to 404,300 units.

Worldwide deliveries fell 25 percent to 546,300 vehicles last month and declined 14 percent to 1.38 million in the January-February period.

The decline is mainly due to the novel coronavirus epidemic. Factories were closed and consumers were reluctant to leave their homes to purchase cars.

Volkswagen Chief Executive Officer Herbert Diess said the company sees potential for the Chinese market to recover over the course of the year.

He said nearly all of VW’s Chinese plants are running and sales are picking up.

Volkswagen Group China and two of its joint ventures donated 120 million yuan (US$17.1 million) to support coronavirus relief work.

Frank Schwope, an auto analyst at Nord LB, said the February collapse of sales in China is extremely alarming. He said as the coronavirus has spread to Europe and the United States, the crushing economic impact in China could happen in other important markets in March and April.

Diess said that 2020 is a very difficult year as the coronavirus presents car manufacturers with myriad unknown operational and financial challenges.




 

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