Volkswagen Group stated sales of its cars declined by 23% on the year to 2 million cars in the January to March period but is hopeful that the Chinese market would recover soon given the reports of reduction in coronavirus crisis in the country.
China is the automaker’s single biggest market accounting for a big chunk of its profits.
Sales reductions because of the virus’s spread in China had reduced in April, the head of Volkswagen’s China business Stephan Woellenstein informed reporters on a call.
Referring to the country’s auto market overall, Woellenstein said the reduction in sales in April was estimated to be between 15% and 20% from a year ago, while the decline in March, at the height of the pandemic, had been 40%.
“If things continue as they do now, we could have reached last year’s level again in June,” he stated. “We see a normalization with view to the summer.”
Volkswagen’s sales were faring slightly better compared to the Chinese market as a whole, he said. But any further recovery hinged on if Beijing implemented economic relief measures.
Reporting its worldwide sales in March, Volkswagen stated deliveries declined 37.6% at 623,000 vehicles year-on-year.
This came after the pandemic triggered plant closures and declines in sales as customers were tied up at home under lockdown measures, and business activity came to a stop, raising concerns of a global recession.
In western Europe Volkswagen’s March sales dropped 44.6% year-on-year. In central and eastern Europe they dropped 23.1%, in North America they dropped 42% in North America and in China they dropped 35%.
Car sector experts believe reduction in April sales globally could be steeper overall, as the entire impact of lockdowns or movement restrictions work their way through the system.
Volkswagen had on Thursday withdrew its outlook for 2020 because of the uncertainty related to the virus, which caused operating profit to decline 81% in the first quarter.
About 82,747 people in China, have been confirmed as being infected with the coronavirus. The virus has killed 4,632 people in the country. Although these figures are heavily disputed and experts say the government has deliberately under-reported the figures.