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Volkswagen burning through RM 9.65 billion a week amid Covid-19 crisis

Zamil Syaheer ยท Mar 31, 2020 10:36 AM

Volkswagen burning through RM 9.65 billion a week amid Covid-19 crisis 01

Thanks to a slew of slow demands for new cars, disruptions in supply chain and COVID-19 pandemic, Volkswagen AG may have to cut jobs and extend the closure of its factory as the maker is spending RM 9.65 billion ($2.2 billion Euro) a week, said CEO Herbert Diess in an interview by German TV reported by Reuters.

Volkswagen burning through RM 9.65 billion a week amid Covid-19 crisis 02

Volkswagen is not been making any sales or revenues outside of China, with sales down by 40 percent in March, and currently is looking for ways to resume production elsewhere that wouldn't endanger its staff.

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Volkswagen burning through RM 9.65 billion a week amid Covid-19 crisis 01

"We need to rethink production. We do not yet have the discipline that we had in China at our German locations," he said. "Only if we, like China, Korea or other Asian states, get the problem under control then we have a chance to come through the crisis without job losses. It requires a very sharp intervention," Diess said.

Volkswagen burning through RM 9.65 billion a week amid Covid-19 crisis 02

As China is slowly opening its gate for the international market, demand for cars in China is picking up again but production is only at half the level due to the pandemic. The automaker is looking into ways to resume manufacturing with workers distancing themselves, including by stepping up the hygiene level and disinfecting.

Volkswagen burning through RM 9.65 billion a week amid Covid-19 crisis 03

Volkswagen has 671,000 workers and has 124 factories around the world of which 72 are in Europe, with 28 of those in Germany. Early this month, Volkswagen suspended production in Europe due to the pandemic. The plant closure in Germany is extended to April 9.

Volkswagen burning through RM 9.65 billion a week amid Covid-19 crisis 04

This situation also forced Volkswagen to take out short-term loans from European Central Bank (ECB), as part of a 750 billion euro plan to boost asset purchases to contain the financial fallout from Covid-19 pandemic.

Zamil Syaheer

Editor

More than 10 years experience, specialising in Motorsports, Advanced Driving, Event Management & Creative Design. He enjoys driving (drifting, actually) anything RWD with a proper LSD over the limit. Versatility is his motto and mantra.

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