Volkswagen sees car sales rebounding in China

TheStar Fri, Oct 30, 2020 09:10am - 5 months ago

Recovery path: A man works at VW plant in Zwickau, Germany. VW’s operating profit before special items came in at 3.2 billion euros (US$3.8bil), rebounding from a loss in the second quarter. — AP

WOLFSBURG: Volkswagen AG (VW) returned to a profit in the third quarter, mirroring upbeat results of peers including Daimler AG and Tesla Inc as robust demand in China helped the car industry navigate the fallout from the Covid-19 pandemic.

Operating profit before special items came in at 3.2 billion euros (US$3.8bil), rebounding from a loss in the second quarter, the company said in a statement. VW also reported better-than-expected sales in the three months through September.

The world’s bestselling automaker benefitted from its large footprint in China, where sales have bounced back to pre-crisis levels. But a second wave of surging infections across North America and Europe, including a partial lockdown in its home market Germany, risk choking a wider recovery.

Several competitors have pointed out that the coming months are difficult to predict after the coronavirus already shuttered factories and showrooms in the second quarter, triggering billions of euros in losses.

VW’s upbeat results add to growing evidence that the auto industry has dealt with the pandemic better than feared.

Carmakers from Ford Motor Co to BMW AG and Fiat Chrysler Automobiles NV reported better-than-expected results in the past weeks. Toyota Motor Corp earlier on Thursday said its global sales rose 2% in September from the same month last year, spurred by strong demand in China and the US.

But in Europe, where VW runs most of its factories, the virus is once again threatening to curb sales.

Germany and France decided to clamp down on movement for at least a month, coming close to the stringent lockdowns in the spring as Europe seeks to limit the rapid spread of the virus.

While the region’s two biggest economies will shutter bars, restaurants and non-essential services, they are allowing most businesses to operate.

Maintaining its sprawling manufacturing network is key for VW after it rolled out critical models including the latest Golf hatchback and started delivering the all-electric ID.3 to customers last month.

Success of the ID.3 and its upcoming SUV sibling, the ID.4, is vital to jumpstart VW’s electric-car push, the industry’s biggest, following a bumpy beginning that was plagued by software problems. — Bloomberg

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