Volkswagen sees strong rebound after containing coronavirus

Volkswagen expects deliveries, earnings, and margins to recover strongly this year as the coronavirus pandemic eases, after nearly halving in profits in 2020 that was still better than the German automaker originally expected.

The automaker is spending tens of billions of euros to reinvent itself as a leader in the market for electric automobiles, a sector where Tesla continues to dominate the market.

“Last year, the Volkswagen Group succeeded in containing the effects of the pandemic on its business and laying important strategic foundations for its transformation at the same time,” finance chief Frank Witter said on Friday.

Deliveries and sales, which were both hit by the coronavirus in 2020, are seen up significantly this year, the automaker said, without being more specific. In 2020, sales dropped 11.8% to 222.9 billion euros ($270.2 billion), while deliveries declined 15.2%.

The operating margin is observed at the upper end of its 5.0-6.5% target range, the automaker said, increasing from 4.3% last year.

“The financial results now available are far better than originally expected and show what our company is capable of achieving, especially in a crisis,” Witter said, adding that the automaker’s plans to carry over the strong momentum into this year.