Categories: Earnings

Global Car Makers Skid Deep Into Red In Second Quarter

The worldwide COVID-19 economic crash has sent major automakers’ revenues and profits plunging over a cliff. Nonetheless, some see signs of an impending recovery.

For its part, Germany’s Volkswagen said on Thursday (July 30) that it had a net loss of $1.9 billion in the second quarter (ending June 30) — a big contrast from the $4.66 billion profit in the same time period in 2019, according to The Wall Street Journal. Volkswagen also owns the Audi and Porsche brands.

In addition, Volkswagen’s second-quarter revenues went down 37 percent to $48.41 billion, compared to $76.8 billion the previous year.

“The first half of 2020 was one of the most challenging in the history of our company due to the COVID-19 pandemic,” Chief Finance Officer Frank Witter told the Journal.

But the company is not standing still. Volkswagen is ramping up its technology program to make it easier for manufacturing and tech companies to link up with its “Industrial Cloud” and increase collaboration.

For its part, Renault reported a net loss of $8.59 billion for the first half of the year, as the French auto giant was hit hard by the COVID-19 crash. The plunge was more than twice the loss Renault posted for all of 2009 amid the infamous financial meltdown. Its alliance partner Nissan Motor Co. suffered losses as well.

The Journal reported earlier this month that auto sales in China were perhaps in a post-pandemic recovery. However, sales in the U.S. continued to fall. “Those manufacturers relatively more exposed to China will be in a better position — or not as bad a position — than those where their footprint is skewed away from China,” said Jonathon Poskitt, an analyst at forecasting group LMC Automotive.

Poskitt said China’s new-car market is expected to decline 11 percent, to 22.8 million vehicles sold this year. However, LMC expects U.S. sales will fall by 22 percent, to 13.3 million vehicles sold in 2020.

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The September 2020 Leveraging The Digital Banking Shift Study, PYMNTS examines consumers’ growing use of online and mobile tools to open and manage accounts as well as the factors that are paramount in building and maintaining trust in the current economic environment. The report is based on a survey of nearly 2,200 account-holding U.S. consumers.

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