VW: “A positive annual result with a black zero is in danger”

VW brand boss Ralf Brandstätter

The Wolfsburg-based VW Group is threatened with a drastic drop in earnings for its main brand VW Pkw in the 2020 financial year. After many years in which the manufacturer of the Polo, Golf, ID.3 and Tiguan was able to achieve billions in profits, the recently ended reporting period is even in the red not excluded. “A positive annual result with a black zero is in danger,” it says in internal VW car documents that was able to view.

In 2019, the VW Passenger Cars brand achieved an operating profit before special items of 3.8 billion euros. In 2018 it was 3.2 billion euros. The annual press and investor conference for the 2020 financial year is scheduled to take place on March 16. At the request of, a VW spokesman said: “Of course we can only make reliable statements as to whether the break-even has been achieved at the annual balance sheet press conference.”

The background to the massive decline in earnings at VW Pkw is primarily the corona crisis. “The situation is and will remain challenging,” said brand boss Ralf Brandstätter in an internal Skype call with 130 of his most important managers. There are also home-made problems: “The crisis also shows that Volkswagen is not robust enough in many regions. There is an acute need for action here, ”says Brandstätter. Brazil and the United States are among the most troubled markets for him. Brandstätter: “The break even is too high compared to the competition. The regions must now continue to work at full speed on their cost structures and develop a plan for greater competitiveness. “The first approaches are” promising, but not yet sufficient “.

In a confidential VW paper it says: “The PSA Group or Toyota, for example, still achieved clearly positive results in the first half of the year (2020; d. Ed.), Whereas Volkswagen has an operating result in the negative range.” VW Pkw posted a deep red operating result of minus 1.5 billion euros in the first six months of 2020 with worldwide sales of 1.1 million vehicles and sales of 28.6 billion euros.

According to internal planning, VW Pkw had originally budgeted the production of 3.6 million new cars worldwide for 2020. According to, the Wolfsburg-based company is now expecting only 2.7 million units. For the delta of almost one million cars, in addition to the corona-related decline in production and demand, there are also errors in the changeover to the new consumption and emissions measurement method “Worldwide harmonized Light vehicles Test Procedure” (WLTP) responsible. “Every year, postponed or too late WLTP tests result in gaps in supply in important markets,” complained Brandstätter. “Here is a sales potential of 100,000 vehicles for our brand.” The VW car boss warned: “We therefore urgently have to deal with the processes and set up an efficient planning program for 2021.”

Alexander Seitz, CFO of the Wolfsburg core brand, appealed to the management of VW Pkw with a fearful look at the development of the operating result in the late summer: “I ask for your support here so that we can achieve the black zero. It will be a Herculean task that is only possible with discipline of costs. ”Since then, reports business partners of the Wolfsburg core brand, VW Pkw has been pushing its efforts to collect the manufacturer’s money from older invoices from suppliers.

From July to September 2020 the business development of VW Pkw had “noticeably recovered”, according to the company. CFO Seitz said: “Despite the ongoing challenges posed by the Covid-19 pandemic, the brand returned to profitability in the third quarter. This is mainly thanks to our consistent measures to reduce costs and secure liquidity and the committed commitment of our employees who, after the temporary standstill in spring, gave everything to catch up again. ”And with a strong product base, VW Cars is winning in many regions even added market share. Seitz: “In the final quarter we are working with all our might to bring the brand’s operating result into positive territory for the full year.” The delivery figures for the fourth quarter will be available to Seitz by January 13, 2021.

It remains to be seen whether VW Pkw will achieve the black zero for the 2020 financial year, which it has been hoping for. A VW spokesman said to “After the positive third quarter, we aimed for a significant profit in the fourth quarter in order to secure break even for the full year.” At the same time, however, he admitted: At the end of the year, however, made it more difficult to achieve this goal. “


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