The pandemic is no match for buyers.
Like every automaker, Volkswagen was hit very hard by the coronavirus pandemic in the first nine months of this year. But the German automaker has just announced it has returned to profit in the third business quarter, achieving an operating profit of 3.2 billion euros. Ford and FCA also just announced profitable third quarters. VW says part of its success was because of increased demand from China for luxury vehicles. Porsches and Audis were specific highlights. In fact, unlike all other VW-owned brands, only Bentley had better sales in the first nine months of 2020 than in 2019.
However, the pandemic is not being ignored. "The coronavirus remains a central problem," VW Chief Financial Officer Frank Witter said. "This situation now is anything but relaxed." Witter is specifically referring to the recently re-imposed national lockdowns in Germany and France.
Still, VW says it is still on track to post a profit for the entire year although it will be "severely lower" than in 2019. That's excellent news considering VW had a Q2 loss of 1.7 billion euros. Another reason for Q3's profit was because of cost-cutting measures VW enacted earlier this year; it just took time for them to finally show results.
If you recall, VW was in a very different state last March when it was spending around $2.2 billion a week even though production had been nearly shut down and sales were terrible. The onset of the pandemic not only delayed the reveal of the new VW ID.4 all-electric crossover but also delayed the sales launch of the VW Atlas and new Atlas Cross Sport, two extremely important models for the North American market.
Looking beyond the rest of the year, VW is reportedly re-examining its many brands and whether or not they're worth retaining or selling. A recent rumor claimed Bugatti could be sold to Croatian automaker Rimac while Lamborghini could be spun off, similar to what FCA did with Ferrari a few years ago. Bentley, meanwhile, is expected to be moved under the direct control of Audi in order to enable the ultra-luxury brand to benefit from new Audi technologies.
What also shouldn't be ruled out is the discontinuation of slow-selling and niche vehicles. VW will continue to tighten its belt and will do what it must in order to avoid losing money.