ZCZC
BCN-06
GERMANY-BUSINESS-AUTOMOBILE-VOLKSWAGEN
Volkswagen lowers sales, profit targets for 2020
FRANKFURT AM MAIN, Nov 18, 2019 (BSS/AFP) – German auto giant Volkswagen on Monday predicted its sales revenues and pre-tax profit would be lower than expected in 2020 due to trade tensions and slowing global growth.
The company said it was expecting an increase of 20 percent in sales revenue and 30 percent in pre-tax profit next year compared to 2016 levels.
In the last update to its multi-year forecast, the company had predicted an increase of 25 percent and 40 percent for sales and profit respectively by 2020.
The targets are not considered official annual forecasts, which VW has not yet released for next year.
Investors were unimpressed with VW’s figures, with the company’s shares shedding 3.2 percent to trade at 177.68 euros ($196.53) around 1:30 pm in Frankfurt (1230 GMT).
“It’s fair to say that the very best of the party is over,” chief financial officer Frank Witter said in a conference call.
“On the sales revenue, we have to acknowledge the changed economic framework conditions in the automotive markets,” Witter said, admitting there would have to be a “necessary adjustment” for VW.
“Trade conflicts like Brexit and the tariff uncertainties, combined with the rising concern of a cooling of the global economy, have led us to take out five percentage points” from the revenue forecast.
Witter said this would have “a knock-on effect” on profits.
But he added: “We are still on track for a substantially better calendar year for 2020 compared to 2016.”
Volkswagen last month said it expected deliveries this year to match the 2018 level rather than the slight growth forecast until now.
Unit sales fell 1.5 percent in the year to September, to around eight million.
The group is attempting to turn the page on its “dieselgate” scandal, which cost it dear in both cash and reputational harm.
Legal cases grind on over VW’s admission four years ago that it illegally fitted 11 million diesel vehicles worldwide with software to make them appear less polluting.
BSS/AFP/MMA/1955HRS