Volkswagen sees China as 'anchor of stability' as annual revenues fall 11.8%

Sales revenues of Germany's largest carmaker Volkswagen declined by 11.8 percent year-on-year to 222.9 billion euros ($265.4 billion) in fiscal 2020 as a result of the COVID-19 pandemic as well as negative exchange rate effects, the company said on Tuesday.

Volkswagen's operating result even dropped by 43 percent compared to 2019 and fell to around 9.7 billion euros, according to the company.

"We have had to perform the greatest balancing act in the company's history in recent months, addressing the COVID-19 pandemic while pushing our transformation into a technology company," said Herbert Diess, chief executive officer (CEO) of Volkswagen.

In 2020, Volkswagen delivered a total of 9.1 million vehicles across all brands, a decline of 15.1 percent, according to the company.

China "remained the largest single market for Volkswagen in 2020" with a market share of 19.3 percent. According to Volkswagen, newly introduced car models in particular achieved a good market performance in China.

China "recovered quickly" and "proved itself as an anchor of stability in the crisis," with all brands achieving positive results. The new energy vehicle (NEV) sector grew fastest in China. With seven new NEV models, Volkswagen now offers 22 electrified models in China.

In order to be "prepared for rapidly growing demand for e-mobility," Volkswagen also ramped up its production of electric drive components in China last year, according to the company.

Declining by almost 20 percent, Volkswagen's sales in the company's domestic market Germany fell in line with the overall decline in western Europe, attributable to the "negative impact of the spread of the coronavirus."

For 2021, Volkswagen expected its business to "recover significantly," assuming a successful containment of the COVID-19 pandemic. The German carmaker aimed to "further improve its profitability," bringing the operating return on sales back to around seven to eight percent.

Following the announcement, Volkswagen, listed at Germany's DAX index of the country's 30 largest listed companies, was the biggest winner with shares increasing by more than eight percent at the end of trading on Tuesday.