After releasing strong 2019 sales figures, Volkswagen has announced it will suspend production across Europe, citing coronavirus concerns and a “rapid decline” in the automotive markets.
The Volkswagen Auto Group posted growth across its Volkswagen, Skoda, Seat, Bentley, Porsche and Scania brands in 2019 (with Audi and Volkswagen Commercial Vehicles the only brands to see decline), however the early months of 2020 have thrust the marque into uncertainty.
“The spread of coronavirus is currently impacting the global economy,” Volkswagen’s Frank Witter said. “It is uncertain how severely or for how long this will also affect the Volkswagen Group.
“Currently, it is almost impossible to make a reliable forecast.”
Sales for Volkswagen over January and February were down approximately 15 per cent, according to a report from Auto News Europe.
Earnings in the January to March period this year are expected to be down roughly 50 per cent from 2019 figures, Mr Witter expects.
Above: Volkswagen CEO Herbert Diess
Despite the early 2020 figures, Volkswagen's CEO Herbert Diess is confident the marque has laid the foundation for a strong future: “2019 was a very successful year for the Volkswagen Group. We have laid vital groundwork for all relevant changes.”
Volkswagen will suspend production across its European plants from the cessation of the late shift this Thursday.
At this stage, the closure is set to last for 14 days however it’s possible this will change with measures taken by authorities.
Volkswagen is not alone in halting automotive production in Europe, with Fiat Chrysler and Ford, along with a number of parts suppliers, also confirming they have closed their European factories for the immediate future.
Others are expected to follow, and factories in the US are currently working but observing strict government- and union-guided procedures.
Tesla briefly attempted to continue production at its Fremont plant – despite strict 'shelter-in-place' rules enacted in California – declaring itself an "essential business". California quickly disabused the company of that notion. LA Times has that story.
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