VW Sales, Profits Plunge During Coronavirus
Global sales fell 23% to 2 million vehicles in the first three months of the year, from 2.6 million in the year-earlier quarter, the company said Wednesday. Operating earnings excluding financial items such as interest and taxes shrank by 81% to 0.9 billion euros from 4.8 billion euros ($5.2 billion) a year earlier.
The Federal Trade Commission alleges that Volkswagen deceived customers during a seven-year period by selling its diesel cars based on fraudulent claims made through its marketing campaigns. That campaign included Super Bowl ads, online social media campaigns and print advertising targeted to “environmentally conscious” consumers.
Scandal Hurts Volkswagen 3Q, But Sales OK
Market analysts expected a quarterly loss, the company’s first in over a decade. The €1.67 billion ($1.83 billion) loss was, in fact, not as bad as analysts’ expectations of a loss of €2.11 billion due to the company’s rigged U.S. diesel emissions tests. Sales revenue rose 5.3% to €51.5 billion.
The automaker’s emissions deception flushes away decades of hard-earned goodwill.
Volkswagen AG has been rattled to the core by a scandal that threatens to batter the VW brand around the world, hand a golden opportunity to its main rivals in Europe — Ford and Opel — and all but destroy a long, hard and so far fruitless effort to become a major player in the U.S.
The automaker will return to the big game, but consultants speculate the brand needs to move its advertising in a new direction.