Volkswagen's sales in China drop off significantly in Q1

Volkswagen Group China sold a total of 455,800 vehicles in China in the first quarter of this year, down more than 35 percent year on year, according to a statement published by Volkswagen.

The decline is due to consumers exercising more caution during the coronavirus economic environment. In the first quarter of this year, auto manufacturers sold altogether 3.67 million vehicles in China, a decrease of more than 42 percent year on year.

"With the improvement of the COVID-19 situation and the overall recovery of the auto industry, we have seen a series of positive signals," said Stephan Wöllenstein, chief executive officer of Volkswagen Group China. 

"We have full confidence in the recovery of Volkswagen's business and automobile market in China. This year the company will launch five new models as planned and continue to advance our product offensive," he said.

In the first three months, China's passenger-car sales were 2.88 million, down 45 percent year on year. Volkswagen's market share in China was around 15.8 percent.

The German automaker said its performance is better than the overall market, and its market share has increased compared with the same period last year.

In the first quarter of 2019, China sold 5.26 million passenger cars and Volkswagen has a market share of 13.4 percent.

Volkswagen's Chinese dealer network has vastly improved of late. In mid-February, only 15 percent of dealers were up and running, but now all have resumed operation.

More than 125,000 sport-utility vehicles were delivered to Chinese consumers in the first quarter, accounting for 27 percent of total sales (compared with 21 percent in the first quarter of 2019). The automaker did not release its sedan sales figures for the first quarter but said several car models sold well.

Although Volkswagen expressed confidence in the Chinese market due to the improving economy, company officials said the pandemic has had a significant impact on its worldwide business.

The company withdrew its global outlook for 2020. 

"The impacts resulting from the pandemic on customer demand, the supply chain and production cannot currently be accurately forecast," a Volkswagen official said.

The automaker is planning a phased production restart with enhanced workforce safety standards. It has implemented extensive measures to reduce costs, placing high priority on securing liquidity, optimizing working capital and prioritizing investments.