German auto giant Volkswagen AG yesterday said the group was preparing to shutter most of its European plants as the COVID-19 pandemic disrupts supply chains and sends demand plummeting.
“Production will be halted at our Spanish plants, Setubal in Portugal, Bratislava in Slovakia and the Lamborghini and Ducati plants in Italy before the end of this week,” Volkswagen chief executive officer Herbert Diess said. “Most of the other German and European plants will begin preparing to suspend production, probably for two to three weeks.”
Diess said that the German auto giant was bracing for a “very difficult” year as the COVID-19 pandemic wreaks havoc with the global economy.
The group did not unveil an outlook for this year, saying the volatile situation and the unprecedented shocks to supply and demand made it “almost impossible” to make a reliable forecast.
“2020 is a very difficult year. The corona pandemic presents us with unknown operational and financial challenges,” Volkswagen chief executive officer Herbert Diess said in a statement.
“We will succeed in overcoming the corona crisis by pooling our strengths,” he added.
The stark assessment came as the group published its full results for last year, having already released partial figures last month.
The firm, whose stable of 12 brands includes Porsche, Audi, Seat and Skoda, saw revenues climb 7.1 percent to 252.6 billion euros (US$281.3 billion).
It achieved a net profit attributable to shareholders of 13.3 billion euros, up 12.8 percent from 2018, driven by strong sales of more expensive models.
As more European governments impose measures to keep people at home to stem the spread of the virus, automakers have begun shutting down factories.
Italian-American automaker Fiat Chrysler Automobiles NV has halted production at six plants in Italy and one each in Serbia and Poland until Friday next week.
France’s PSA Group, whose brands include Peugeot, Citroen and Opel, has said that it, too, would shutter its European production sites this week.
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