Volkswagen today reported a second-quarter operating loss as vehicle deliveries dropped by almost a third due to the Covid-19 pandemic.
This has forced the German carmaker to cut its dividend despite a gradual rebound in demand.
The multi-brand car and truck maker predicted a significant decline in full-year sales, even though it said it was seeing a gradual recovery globally as lockdowns eased.
The company said its 2020 operating profit, before and including special items, would be severely down on the year before, albeit in positive territory.
It posted an adjusted operating loss of €1.7 billion in the three months from April to June, down from a €5.1 billion adjusted operating profit the same time last year.
Volkswagen cut its dividend proposal for 2019 to €4.80 per ordinary share and €4.86 per preferred share from a previously targeted €6.50 per ordinary share and €6.56 per preferred share.
Volkswagen, like most of its peers, has been bit hard by a drop in demand caused by the pandemic, which has led to restrictions on movement, economic crises and swathes of job losses globally.
One earnings outlier, however, has been French rival PSA Group.
PSA delivered a second-quarter profit this week and reiterated its goal of achieving margins of over 4.5% in its automotive unit this year, even though these were down to 3.7% in the first half.
PSA has been more aggressive about restructuring its operations, and pared down the variety of vehicles it offers.
It has also withdrawn from some markets where it does not command a significant market share even before the pandemic.
Volkswagen said the adjusted operating return on sales in its automotive division fell to -9.1%, down from 8% last year, weighed down by charges to cover potential diesel risks.
The group is reviewing its corporate structure but there are currently no new plans to explore divestments or listings, according to its chief financial officer Frank Witter, who said that all 12 brands, which include Bentley, Bugatti, Lamborghini, Porsche and Audi, are still core to the business.