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Coronavirus prompts VW to stop production throughout Europe

FRANKFURT — Volkswagen Group, the world's biggest carmaker, is suspending production at factories across Europe as the coronavirus pandemic hits sales and disrupts supply chains, the company said on Tuesday. The German carmaker, which owns the Audi, Bentley, Bugatti, Ducati, Lamborghini, Porsche, Seat and Skoda brands, also said that uncertainty about the fallout from coronavirus meant it was impossible to give forecasts for its performance this year. "Given the present significant deterioration in the sales situation and the heightened uncertainty regarding parts supplies to our plants, production is to be suspended in the near future at factories operated by group brands," Chief Executive Herbert Diess said on Tuesday. Volkswagen's powerful works council concluded it was not possible for workers to maintain a safe distance from each other to prevent contagion and recommended a suspension of production at its factories from Friday. Production will be halted at VW's Spanish plants, in Setubal in Portugal, Bratislava in Slovakia and at the Lamborghini and Ducati plants in Italy before the end of this week, Diess said. Most of its other German and European factories will prepare to suspend production, probably for two to three weeks, while Audi said separately it would halt output at its plants in Belgium, Germany, Hungary and Mexico. Volkswagen's vast factories in Chattanooga, Tennessee, in Puebla, Mexico, and plants in Brazil were not affected, but that would depend on how the coronavirus spreads, VW said. Volkswagen has 124 production sites worldwide of which 72 are in Europe, with 28 in Germany alone. "2020 will be a very difficult year. The coronavirus pandemic presents us with unknown operational and financial challenges. At the same time, there are concerns about sustained economic impacts," Diess said.   Production in China resumes Volkswagen Group sold 10.96 million vehicles last year, putting it ahead of Toyota based on the latest figures from the Japanese carmaker. Globally, VW employs 671,000 people and it delivered 4.86 million vehicles to European customers in 2019. Only last month the car and truck maker based in Wolfsburg, Germany, predicted that vehicle deliveries this year would match 2019 sales and forecast an operating return on sales in the range of 6.5% to 7.5%. "The spread of coronavirus is currently impacting the global economy. It is uncertain how severely or for how long this will also affect the Volkswagen Group.

Lamborghini and Bentley may hold off on SUVs so VW can conserve cash

After surveying the European economic scene, Volkswagen may have decided now is not the time to launch utility vehicles with Bentley and Lamborghini badges. Bentley officials say they will continue to push for support for the EXP 9 F and Lamborghini CEO Stephan Winkelman has said planning for the Urus will continue until VW tells it to stop.
That decision could come on November 23, when VW's board will vote on the company's budget for equipment, factories and vehicles. With VW's sales slowing and the Euro economy slumping further, some industry watchers say the company is more likely to build its cash reserves than to introduce super-expensive luxury SUVs or crossovers.
"Such vehicles are anything but obligatory during a crisis," says Frankfurt-based Equinet AG analyst Tim Schuldt in a new Automotive News Europe story. "Delaying their launch would be no drama but help save costs."

Volkswagen finds CO2 'irregularities' for 800k vehicles

The latest issue for Volkswagen affects another 800,000 vehicles, and this time its for irregularities in CO2 emissions certifications. VW estimates this issue could cost the company $2.2 billion to fix. The company officially makes no specific mention of which engines are covered, the models they are in, or even where they are located. VW discovered the situation during its ongoing internal investigation, and, according to the automaker, "it was established that the CO2 levels and thus the fuel consumption figures for some models were set too low during the CO2 certification process." Most of the affected vehicles are diesels, and the company is now reaching out to "the responsible type approval agencies" to figure out the next step. While VW isn't officially confirming which models and engines are involved, Automotive News reports that it affects some 2012 and later VW, Audi, Seat, and Skoda models with the company's 1.4-, 1.6-, and 2.0-liter diesel engines, as well as the 1.4-liter ACT gasoline engine. The issue mainly affects vehicles sold in Europe. "The Board of Management of Volkswagen AG deeply regrets this situation and wishes to underscore its determination to systematically continue along the present path of clarification and transparency," CEO Matthias Muller said in the announcement. Volkswagen Group of America spokesperson Jeannine Ginivan was able to provide some further clarification to Autoblog. "This is not related to US-certified vehicles," she said. Clarification moving forward: internal investigations at Volkswagen identify irregularities in CO2 levels Matthias Muller: "Relentless and comprehensive clarification is our only alternative." Around 800,000 Group vehicles could be affected Initial estimate puts economic risks at approximately 2 billion euros The Volkswagen Group is moving forward with the clarification of the diesel issue: during the course of internal investigations irregularities were found when determining type approval CO2 levels. Based on present knowledge around 800,000 vehicles from the Volkswagen Group could be affected. An initial estimate puts the economic risks at approximately two billion euros. The Board of Management of Volkswagen AG will immediately start a dialog with the responsible type approval agencies regarding the consequences of these findings. This should lead to a reliable assessment of the legal, and the subsequent economic consequences of this not yet fully explained issue.