New Volkswagen vehicles are parked on a freight train in front of the Volkswagen plant in Zwickau. Volkswagen intends to interrupt production at many plants due to the growing danger to the workforce. (picture alliance / dpa)
The Volkswagen Group is to temporarily shut down production at the vast majority of its plants starting Friday in response to the coronavirus pandemic, sources from the German auto giant's works council said.
They told dpa that the decision was taken in consideration of employees whose "work is carried out shoulder to shoulder ... on the assembly lines," arguing that this was not in keeping with German government guidelines on social-distancing.
Europe's largest carmaker on Tuesday reported a boost in profits for its core VW passenger cars brand in 2019, but warned of a "very difficult" year ahead.
"The corona pandemic presents us with unknown operational and financial challenges," said Herbert Diess, chairman of the management board, on announcing the carmaker's final 2019 results.
The annual press conference was held online, with the Wolfsburg-based company avoiding a bigger event due to the risk of spreading infections.
Operating profit before special items for VW passenger cars increased to 3.8 billion euros (4.2 billion dollars), compared to 3.2 billion the previous year.
The coronavirus pandemic is causing a major headache for the firm, due to its impact on global supply chains and demand in key markets such as China, where the virus broke out.
In addition, "the diesel issue," as Volkswagen refers to the emissions cheating scandal that has rocked the company in recent years, continues to take its toll.
The costs for items such as legal fees and product recalls related to the scandal came in at 1.9 billion euros in 2019, largely unchanged on the year, the carmaker said.
And this year brings further costs, with the company set to pay out damages to German consumers in a class-action lawsuit.
At 88.4 billion euros last year, sales revenue for Volkswagen's passenger cars went up by 4.5 per cent, with the operating return on sales before special items increasing slightly to 4.3 per cent, compared to 3.8 per cent in 2018.
At the group's Porsche subsidiary, the company reported a modest increase in operating profit by 2.4 per cent year-on-year to reach 4.2 billion euros.
Skoda, Seat and Bentley, as well as truck-makers Scania and MAN, also saw boosts to their bottom line.
Meanwhile, operating profits at subsidiary Audi slumped from 4.7 to 4.5 billion euros, and from 780 to 510 million for Volkswagen's commercial vehicles.
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