VW says its profit will be at a ‘severely lower’ level compared with last year
VW says its profit will be at a ‘severely lower’ level compared with last year © REUTERS

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Volkswagen slumped to a loss in the second quarter as the German carmaker succumbed to the effects of the pandemic, despite cutting costs and re-closing factories in order to reduce output.

The group posted a loss of €1.4bn in the first half of 2020, compared with a profit of €9.6bn in the same period the previous year. Revenues fell 23 per cent to €96bn, and car sales dropped 27 per cent to 3.9m vehicles.

After reopening some of its plants following shutdowns in March, VW was forced to close some lines again because of weaker-than-expected demand.

The group still expects to make a profit in the full year, though “severely lower” than last year’s level.

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“The first half of 2020 was one of the most challenging in the history of our company due to the Covid-19 pandemic,” said chief financial officer Frank Witter.

“We introduced comprehensive measures aimed at reducing costs and securing liquidity early on, which enabled us to limit the impact of the pandemic on our business to a certain degree.”

He added the group was “cautiously optimistic” about the second half of the year “due to the positive trend exhibited in our business over the past few weeks and the introduction of numerous attractive models”.

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