Volkswagen weathers pandemic with $10.7 billion profit

Volkswagen reported it posted a profit of $10.7 billion after tax in 2020. PHOTO CREDIT: Jens Meyer

FRANKFURT, Germany — German automaker Volkswagen said today it made a better than expected profit of 8.8 billion euros ($10.7 billion) after tax in 2020 despite the disruption from the pandemic.

The company said the rapid recovery of China, its largest single market, helped the bottom line, as did resilient demand for luxury autos despite the pandemic.

The Wolfsburg-based carmaker said that it had taken important strategic steps to accelerate its push into software and digital technologies and services. It tripled its sales of electric vehicles to 422,000 ahead of stricter European Union limits on emissions of carbon dioxide, the primary greenhouse gas blamed for global warming.

The earnings figure was off 37% from 2019. Sales revenue was down 11.8% at 222.9 billion euros, but fell less than the 16.4% drop in unit sales to 9.2 million vehicles. More financial details are to be announced March 16 at the company’s annual news conference.

“The financial results now available are far better than originally expected and show what our company is capable of achieving, especially in a crisis,” Chief Financial Officer Frank Witter said in a statement. “We intend to carry over the strong momentum from the significantly better second half into the current year, and the programs for reducing our fixed costs and in procurement will make us more robust in the long term.