VOW Volkswagen AG

By William Boston 

BERLIN -- German auto manufacturer Volkswagen AG on Friday reported strong growth in sales and earnings in 2019, but warned that any forecast for the current year faced uncertainty from geopolitical turbulence and the impact of the coronavirus epidemic.

Volkswagen is the largest auto maker in the world by sales, and the biggest in China, which has seen economic activity nearly grind to a halt in the past month as the coronavirus spread and the Chinese government's efforts to stem the epidemic shut factories and kept people home.

In recent days, the virus has spread to Europe and the U.S., threatening to become a pandemic and a huge risk to Europe's already weak economy. In its earnings report, Volkswagen predicted a 4% decline in overall sales this year, but said it still expected sales from its auto brands that include VW, Audi, Porsche, Skoda and SEAT to rise slightly.

That forecast is subject to a number of caveats, the company said, saying it would have to keep an eye on "uncertainties including geopolitical tensions and conflicts as well as epidemics spreading across countries and regions such as the current spread of the coronavirus."

Volkswagen said sales in 2019 rose 7% to EUR253 billion ($278 billion), and profit rose 13% to EUR13.3 billion ($15 billion). Production fell 2% to 10.8 million vehicles.

Volkswagen gave no detailed estimate of how the loss of production and sales in the wake of the virus in China would affect sales and earnings in the first quarter. China accounts for about 41% of Volkswagen's overall unit sales and its business in China makes a substantial contribution to annual earnings.

A survey published this week by the European Chamber of Commerce said a majority of European companies it polled expected a severe impact to business from the virus.

(END) Dow Jones Newswires

February 28, 2020 11:46 ET (16:46 GMT)

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