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Volkswagen warns of ‘very difficult’ year in coronavirus crisis

WOLFSBURG: The CEO of Volkswagen on Tuesday said the German auto giant was bracing for a “very difficult” year as the coronavirus epidemic wreaks havoc with the global economy.

The group did not unveil an outlook for 2020, saying the volatile situation and the unprecedented shocks to supply and demand made it “almost impossible” to make a reliable forecast.

“2020 is a very difficult year. The corona pandemic presents us with unknown operational and financial challenges,” chief executive Herbert Diess said in a statement.

“We will succeed in overcoming the corona crisis by pooling our strengths,” he added.

The stark assessment came as the group published its full results for 2019, having already released partial figures last month.

The firm, whose stable of 12 brands includes Porsche, Audi, Seat and Skoda, saw revenues climb 7.1 percent to 252.6 billion euros ($282 billion).

It achieved a net profit attributable to shareholders of 13.3 billion euros, up 12.8 percent on 2018, driven by strong sales of more expensive models.

The group is due to hold its annual press conference by live stream later on Tuesday.

As more European governments impose measures to keep people at home to stem the spread of the virus, carmakers have begun shutting down factories.

Italian-American automaker Fiat Chrysler has halted production at six plants in Italy and one each in Serbia and Poland until March 27.

France’s PSA Group, whose brands include Peugeot, Citroen and Opel, has said it too will shutter its European production sites starting this week.

Volkswagen’s finance chief Frank Witter said it was “uncertain how severely or for how long” the pandemic upheaval will affect the company.

“Currently, it is almost impossible to make a reliable forecast,” he said.

“We are making full use of all measures in task force mode to support our employees and their families and to stabilise our business.”

Volkswagen also said on Tuesday it was preparing to shut most of its European plants, joining a slew of other carmakers as the coronavirus pandemic disrupts supply chains and sends demand plummeting.

Production will be halted in Spain, Portugal and Slovakia and Italy before the end of this week,” CEO Herbert Diess said in a speech.

“Most of the other German and European plants will begin preparing to suspend production, probably for two to three weeks,” he added.

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