Volkswagen Posts $940 Million First-Half Loss and Cuts Dividend as Pandemic Hammers Sales

First Up 07/30/20

Beltway Talk Podcast: Mid-Year Dealer Review with Cody Lusk

Listen to the latest episode of Beltway Talk to hear AIADA President and CEO Cody Lusk discuss AIADA’s recent work on behalf of dealers this summer, why he’s encouraged at how dealers are forging ahead and serving their communities in the midst of a pandemic, and what he sees through the rest of 2020. You’ll also find out why it is more important than ever for dealers to be involved in what lawmakers are doing in Washington, D.C. Listen in and subscribe here. 

Volkswagen Posts $940 Million First-Half Loss and Cuts Dividend as Pandemic Hammers Sales

Volkswagen has reported an operating loss of 800 million euros ($940 million) for the first half of 2020 and cut its dividend as the coronavirus pandemic hammered car sales, reports CNBC. This compares to a profit of 10 billion euros for the same period last year. Group sales fell by 23.2% while deliveries plunged 27.4% year-on-year, with the percentage gap to last year’s performance falling consistently since May as worldwide shutdowns caused demand to crater. At its annual general meeting in September, the German automaker will now propose a dividend per ordinary share for the fiscal year 2019 of 4.80 euros, down from a previously announced 6.50 euros. Although it warned that “challenges will also arise particularly from the increasing intensity of competition, volatile commodity and foreign exchange markets and more stringent emissions-related requirements,” Volkswagen said it still expects to be profitable for the full year. Read more here. 

GM Posts $800M Loss in 2Q, to End Salary Cuts

General Motors Co. burned $7.8 billion in the second quarter navigating the coronavirus pandemic, but the Detroit automaker still beat Wall Street expectations and is hopeful it can pay down debt and generate cash going forward, reports The Detroit News. GM reported a second-quarter net income loss of $758 million on revenue of $16.8 billion in the second quarter, even as it declined to provide guidance for the rest of the year. CFO Dhivya Suryadevara said the automaker expects its operating profit to be in the range of $4 to $5 billion — provided U.S. vehicle sales run at a 14-million-unit rate in the second half of the year, production is not interrupted, there are no significant supplier disruptions, and GM is able to rebuild inventory to 600,000 units by year end. Read more here. 

CES Goes Digital – But Will Automakers (Virtually) Stick Around in 2021?

It’s been a tough year for auto shows, virtually every major global event this year, from New York to Paris to Beijing, canceled in the face of the coronavirus crisis. The Detroit Bureau reports that organizers now say they plan to go to an “all-digital” format for CES in January. Better known as the Consumer Electronics Show, the annual show has become a major event for automakers at a time when their vehicles are becoming increasingly high tech. Dozens of automakers and auto suppliers filled an entire wing of the sprawling Las Vegas Convention Center in January 2020. “Amid the pandemic and growing global health concerns about the spread of COVID-19, it’s just not possible to safely convene tens of thousands of people in Las Vegas in early January 2021 to meet and do business in person,” said Gary Shapiro, president and CEO of CTA, the group that runs the annual show. Read more here.

U.S. Economy Set to Show Steep Contraction, Slow Early Recovery

The U.S. economy is set to officially record its steepest quarterly contraction since World War II, and recent signs point to a slowing recovery as the country faces a summer surge in coronavirus cases, reports The Wall Street Journal. Economists surveyed by The Wall Street Journal project second-quarter U.S. gross domestic product—the broadest measure of goods and services produced across the economy—fell at a seasonally adjusted annual rate of 34.7% from April through June, a period when states imposed lockdowns across the country to slow the virus and then lifted restrictions. The annualized rate overstates the severity of the drop in output because it assumes the quarterly pace continues for a year, something forecasters don’t expect to happen. The Commerce Department on Thursday will release its initial GDP estimate for the quarter ended June 30. Read more here. 

Webinar: Drive Your Online Reputation, CSI, & SSI Scores 

Join AIADA's next AutoTalk webinar on Tuesday, August 4 at 2:00 p.m. to learn how to drive your dealership's online reputation. Listen to Acura Columbus Dealer, John Connelly give his firsthand experience of implementing some best practices. He will be joined by Thomas Clawson of Podium to discuss the following: 

  • Understanding how to effectively text customers from search to sold to service

  • Looking at the newest sales and service satisfaction reports to understand the impact of texting

  • Driving your online reputation through communication best practices

Click here to register.

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