VWAGY - Volkswagen AG

Other OTC - Other OTC Delayed Price. Currency in USD
-0.83 (-5.95%)
At close: 3:59PM EDT
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Previous Close13.94
Bid0.00 x 0
Ask0.00 x 0
Day's Range12.73 - 13.45
52 Week Range10.60 - 20.35
Avg. Volume203,520
Market Cap65.206B
Beta (5Y Monthly)N/A
PE Ratio (TTM)N/A
Earnings DateN/A
Forward Dividend & YieldN/A (N/A)
Ex-Dividend DateN/A
1y Target Est22.70
  • Bloomberg

    VW CEO Says Production Shutdown Costs $2.2 Billion Per Week

    (Bloomberg) -- Volkswagen AG’s unprecedented move to halt output on both sides of the Atlantic costs the world’s largest automaker 2 billion euros ($2.2 billion) per week, and Chief Executive Officer Herbert Diess said decisive action is critical to overcome the coronavirus pandemic.Sales outside China have effectively come to a standstill, while demand in the country, VW’s largest single market, has clawed back to about 50% of pre-crisis levels, Diess said during a panel discussion broadcast by ZDF late Thursday.VW can endure the factory shutdowns in Europe and the Americas for several weeks, “but not indefinitely,” Diess said. The company is in a strong financial position, but he didn’t rule out “structural measures” if the crisis drags on for many months or even years in a worst-case scenario.“Even for the financially strong company Volkswagen, the current exceptional situation represents an acute economic danger,” Diess, Chairman Hans Dieter Poetsch, and works council chief Bernd Osterloh said Friday in a joint letter to workers. Last year, VW generated 50 million euros in profit daily, money that’s “urgently needed” to fund investments in new technology and products, they added. Recouping incurred losses will be difficult and take a long time, “much longer than the coronacrisis itself. And with every crisis day, it’s becoming more difficult,” the top executives said in the letter seen by Bloomberg.In a separate interview, Chief Financial Officer Frank Witter said that, as things stand, VW won’t need financial support from the German government, beyond tapping into cash for employees on short-time work.“Seen from today’s perspective, I rule that out,” Witter told Boersen-Zeitung newspaper Friday. “In the car unit, we have strong cash flow and decent net liquidity.”Witter flagged what he called a “significant network of confirmed, partly syndicated credit lines” of more than 30 billion euros. “Using these instruments, we should have the strength to get through the corona crisis and maintain liquidity at the necessary level,” Witter said.“The threat of the coronavirus is more punitive to auto credit quality than the Great Recession,” Bloomberg Intelligence analyst Joel Levington said in a note. “Credit profiles can be swiftly decimated during global auto-sector downturns,” he said.Diess stressed that strict discipline in following medical advice is key to fighting the spread of the virus and said VW is already preparing to resume operations. These efforts include intensified sanitary measures and ensuring more distance between employees in work spaces.He’s “confident” VW can roll out its important ID.3 electric car this summer as planned but said that business conditions overall remain difficult to predict.VW shares dropped 8% to 116.85 euros as of 3:00 p.m. in Frankfurt, amid a regional decline in share prices across Europe.(Updates with comments from letter to employees in fourth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • VW burning through $2.2 billion a week with factories closed by coronavirus

    VW burning through $2.2 billion a week with factories closed by coronavirus

    Volkswagen may have to cut jobs if the coronavirus pandemic is not brought under control as the carmaker is still spending about 2 billion euros ($2.2 billion) a week, Chief Executive Herbert Diess told German TV channel ZDF. Diess told the Markus Lanz talkshow that the German company, which employs 671,000 people worldwide, was not making any sales outside China and was looking for ways to resume production elsewhere that wouldn't endanger its staff. Demand for new cars in China is picking up again, but production is only at half the level prior to the crisis, he said.

  • Volkswagen's Skoda extends Czech factory outages to April 14

    Volkswagen's Skoda extends Czech factory outages to April 14

    Czech carmaker Skoda Auto, part of the Volkswagen Group <VOWG_p.DE>, will extend a stoppage at its domestic plants to April 14 from an original return date of April 6, the company said on Friday. Skoda is the country's largest exporter and suspended production on March 18 as part of measures to combat the spread of the coronavirus that has put most of Europe on lockdown. VW, the world's biggest carmaker, has stopped production at other factories across Europe as the coronavirus pandemic hits sales and disrupts supply chains.

  • Volkswagen burning through $2.2 billion a week as coronavirus halts production: CEO

    Volkswagen burning through $2.2 billion a week as coronavirus halts production: CEO

    Volkswagen <VOWG_p.DE> may have to cut jobs if the coronavirus pandemic is not brought under control as the carmaker is still spending about 2 billion euros ($2.2 billion) a week, Chief Executive Herbert Diess told German TV channel ZDF. Diess told the Markus Lanz talkshow that the German company, which employs 671,000 people worldwide, was not making any sales outside China and was looking for ways to resume production elsewhere that wouldn't endanger its staff. Demand in China is picking up again but production is only at half the level prior to the crisis, he said.

  • Financial Times

    Volkswagen calls on ECB to accelerate emergency lending

    Volkswagen has called on the European Central Bank to speed up its plans to buy commercial paper directly from the world’s largest companies to help them ride out the coronavirus crisis. The German group told the Financial Times that the ECB should send “clear signals” and purchase the short-term debt, which often matures in as little as six or nine months, “as soon as possible”. VW is one of Europe’s most regular corporate issuers of commercial paper.

  • Reuters

    GM undergoes delicate balancing act to shore up liquidity through crisis

    General Motors Co (GM) is managing a delicate balancing act as it readies to draw down US$16bn in loans while refinancing debt of similar size, facing a longer than expected shutdown of its plants and considerable revenue losses. The automaker gave notice to its lenders that it would borrow an existing credit facility almost in its entirety on Tuesday. GM is on a rocky road as it readies to suffer a significant revenue loss due to the shutdown of its North American plants that could extend beyond March 30.

  • Volkswagen expects car market to recover in summer: FAZ

    Volkswagen expects car market to recover in summer: FAZ

    Volkswagen <VOWG_p.DE> expects the German car market to recover in the summer after the automaker was forced to suspend output because of the coronavirus pandemic, an executive told a newspaper on Wednesday. The company has initially halted production until April 3, but Juergen Stackmann, management board member for the VW passenger cars brand, gave an upbeat assessment to the Frankfurter Allgemeine Zeitung, saying that the Chinese market has already started to pick up. Volkswagen is also looking into new rules to ensure factory workers can keep their distance from each other on the production line.

  • Reuters

    Volkswagen planning shorter hours for 80,000 German workers - Focus

    German carmaker Volkswagen is planning to put around 80,000 employees in Germany on shorter working hours because of the economic fallout from the coronavirus epidemic, Focus magazine reported on Tuesday, citing company sources. The German government has passed economic support measures allowing it to supplement the reduced salaries of workers placed on shorter working hours.

  • Volkswagen to halt production in Russia due to supply shortage from Europe

    Volkswagen to halt production in Russia due to supply shortage from Europe

    Volkswagen <VOWG_p.DE> will suspend its car production in Russia over a supply shortage caused by the coronavirus outbreak in Europe, Volkswagen Group Rus said on Tuesday. Volkswagen last week said its plants in Europe would temporarily shut down for two weeks due to the spread of the coronavirus that has infected more than 330,000 people worldwide, as car manufacturers globally shut factories to both protect workers and in response to falling demand. "At the moment we can provide stable supplies of cars and spare pasts to our dealers and clients," Volkswagen Group Rus said.

  • Reuters

    A quarter of Czech auto sector closed, 60 pct cutting output-industry group

    A quarter of the Czech auto sector will be shut by Monday while another 60% will have markedly cut production, the industry's lobby group said on Sunday, calling for fast-track measures to keep afloat a sector directly employing 170,000 people. The Auto Industry Association (AIA) said companies were laying off contractors and the crisis stemming from the coronavirus outbreak was pressuring core jobs. The auto sector makes up around 9% of economic output and accounts for about 23% of exports for the Czech economy, which relies heavily on manufacturing and selling goods abroad.

  • Italy Struck by Deadliest Day as Virus Prompts Industry Shutdown

    Italy Struck by Deadliest Day as Virus Prompts Industry Shutdown

    (Bloomberg) -- Italy suffered its worst day of coronavirus deaths and shut down almost all industrial production for 15 days, with the pandemic dealing blow after blow across an entire European continent in lockdown.Prime Minister Giuseppe Conte said late Saturday that Italy will temporarily halt all non-essential business activity as the country of 60 million faces its biggest challenge since World War II. Supermarkets, pharmacies, banks and post offices and other essential businesses will stay open, he said.”Stay home, we don’t have a choice,” he told Italians in a televised address.After overtaking China as the most deadly center of the outbreak, Italy alarmingly reported 793 deaths on Saturday, raising the total to 4,825 as hospitals overflow and health-care workers die. The country is fast running out of solutions — social and economic — to contain the catastrophe.It’s not alone: the death count in the U.K. and Spain also surged.Prime Minister Boris Johnson, who was initially reluctant to embrace a large-scale shutdown, warned Britons they can’t expect to be spared: “The numbers are very stark, and they are accelerating. We are only a matter of weeks — two or three — behind Italy.”Desperate TimesWith no end in sight to the carnage, Europe is increasingly on a war footing after restrictions on society that would have seemed outlandish just weeks ago failed to bring down death rates. Italy, a founding European Union member that’s survived its share of political and financial upheavals, is once again on the brink in an EU besieged by its latest crisis.Conte’s measures to contain the spread of the virus mirror initiatives taken by the Lombardy region, the epicenter of Italy’s outbreak and its economic heart. Regional leaders have urged the central government to take tougher action, often imposing their own measures before officials in Rome acted.As the human toll mounts, governments are increasingly throwing out the rulebook to counter the economic impact. Germany, long a holdout on deficit spending, pledged new debt worth almost 4.5% of its economic output. Unprecedented U.K. measures include helping pay people’s wages. The U.S. administration is floating the possibility of about $2 trillion in stimulus.Like Europe’s debt crisis a decade ago and the politically divisive influx of refugees that began in 2015, unified leadership has been in short supply. Helmed by an inexperienced team of EU commissioners in Brussels, the bloc did agree to close its outside borders as a way to protect visa-free travel within the EU.Merkel’s MomentThe focus turns now to Angela Merkel, the German chancellor with debt-crisis experience, who’s holding emergency talks with state leaders on Sunday to discuss further restrictions on public life. She also looks set to end years of balanced budgets.Finance Minister Olaf Scholz said on Saturday that Germany is pledging more than 150 billion euros ($160 billion) in new debt to help small companies cover overheads and aid to low-income earners. Merkel is considering a state of emergency, which would allow her government to ask parliament to set aside the German constitution’s limits on public debt.Merkel has been preparing Germans for the possibility of sweeping shutdowns like those imposed in Italy and Spain, telling them “you need to take it seriously.”Berlin, the capital, on Saturday joined Bavaria and other German states in announcing further restrictions on public movement ahead of Sunday’s meeting.Unprecedented StepsWith cafés, bars and pubs now closed, the U.K. government is falling in line with the trend toward restrictions on social gatherings to curb the spread of the virus. But in the economic sphere it is going much further than its cohorts with a radical set of measures that include the state paying up to 80 percent of a worker’s wages.In Spain, Prime Minister Pedro Sanchez warned the nation on Saturday to expect a further increase in deaths. The country is entering the second week of a state of emergency that has confined most people to their homes with police patrolling the streets to enforce the lockdown. Reported deaths rose by 324 on Saturday to 1,326, about twice the pace recorded the previous day.Most people in Spain “have never had to face something as harsh this,” Sanchez said in an address.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Volkswagen CEO warns factory closures may drag on for weeks

    Volkswagen CEO warns factory closures may drag on for weeks

    The company's brands include Volkswagen, Audi, Bentley, Bugatti, Ducati, Lamborghini, Porsche, Seat and Skoda. Volkswagen is taking measures to secure liquidity, its supply chains, and to continue with strategic projects such as the launch of the company's ID.3 electric car and the supply of battery cells. Germany's number of confirmed coronavirus cases rose by 2,705 to reach 16,662, the Department for Infectious Diseases at the Robert Koch Institute said on Saturday.

  • Volkswagen to close factories in Mexico to protect public health

    Volkswagen to close factories in Mexico to protect public health

    German automaker Volkswagen will temporarily close its factories in Mexico's Puebla and Guanajuato states in a bid to preserve public health, the company's Mexican unit said in a statement on Friday, amid growing worries over the spread of the coronavirus. Another German carmaker also with operations in Mexico, BMW, said in a statement late on Friday that it would extend an already-scheduled Easter stoppage at its factory in San Luis Potosi state. The two automakers' decisions follow other measures taken broadly by companies in Mexico, including an emphasis on working from home if possible as well as restrictions on travel and in-person group meetings.

  • Reuters

    U.S. auto industry backs tax relief, delaying USMCA start after coronavirus

    Groups representing major automakers and suppliers asked U.S. lawmakers on Friday to consider new tax relief and delay the start of a new trade deal as auto sales decline as a result of the coronavirus pandemic. The Alliance for Automotive Innovation -- representing General Motors Co, Volkswagen AG, BMW, Toyota Motor Corp and others -- and the Motor & Equipment Manufacturers Association (MEMA) in a joint letter seen by Reuters backed "key actions" by U.S. lawmakers to help "ensure that sufficient liquidity remains available in the markets."

  • Volkswagen tests ventilator output as carmakers join coronavirus fight

    Volkswagen tests ventilator output as carmakers join coronavirus fight

    German carmaker Volkswagen said on Friday it was joining other manufacturers round the world to explore using 3D printing to make hospital ventilators to combat the coronavirus. Governments are enlisting automakers including Ford, General Motors, Ferrari and Nissan to ramp up production of ventilators and other equipment they are short of to treat the fast-spreading disease. In a statement, Volkswagen said it had assembled a task force, was testing materials, and checking supply chains, to see how it can use 3D printing to help manufacture hospital ventilators and other life-saving equipment.

  • VW e-Bulli is an awesome electric Microbus from Volkswagen and eClassics

    VW e-Bulli is an awesome electric Microbus from Volkswagen and eClassics

    VW has a special treat for you today, and it’s electric. A new team effort between Volkswagen Commercial Vehicles and eClassics has resulted in the creation of what VW is calling the “e-Bulli.” Volkswagen and eClassics have collaborated on an old VW before, too.

  • Reuters

    Italian car parts maker Marelli to halt production in Europe next week

    Italian car parts maker Marelli said on Friday it would suspend most of its European plants next week in response to the spread of the coronavirus. The decision comes came as the worsening virus situation has pushed many of Marelli's clients to halt production in Europe, governments to strengthen measures and with the aim of protecting workers' health, the company said in a statement. The company - which combines former Fiat Chrysler unit Magneti Marelli and Japan's Calsonic Kansei and is controlled by U.S. investment firm KKR - last week suspended Italian operations until March 27.

  • The Zacks Analyst Blog Highlights: General Motors, Ford, Honda Motor, Toyota Motor and Volkswagen AG

    The Zacks Analyst Blog Highlights: General Motors, Ford, Honda Motor, Toyota Motor and Volkswagen AG

    The Zacks Analyst Blog Highlights: General Motors, Ford, Honda Motor, Toyota Motor and Volkswagen AG

  • Reuters

    Toyota extends North America production shutdown through April 3

    Toyota Motor Corp said on Thursday it will extend a planned two-day shutdown of all North American plants through April 3 as the spread of coronavirus continues. Separately Volkswagen AG said it is closing its Chattanooga, Tennessee plant on Saturday and will reopen late on March 29. VW said it would use the time to conduct additional cleaning and to "assess future production plans and market developments."

  • Biggest Factory Closing Since World War II Hits U.S., Europe

    Biggest Factory Closing Since World War II Hits U.S., Europe

    (Bloomberg) -- The economic impact of the growing coronavirus outbreak is shifting from service-driven industries like hotels and restaurants to the manufacturing sector on both sides of the Atlantic, leading to a synchronized shutdown of heavy industry that historians and industry experts say is unlike any seen since the 1940s.Automakers in the U.S. and Europe are idling plants in response to the crisis, echoing the industrial shutdown in China that reverberated through global supply chains earlier this year and adding to the case that a global recession may already be under way.It also may justify President Donald Trump’s declaration Wednesday that he has become a “wartime president” leading the fight against an “invisible enemy” in the virus.Among Trump’s moves was his authorization of powers under the Defense Production Act, which was established at the time of the Korean War to allow the government to direct industrial capacity. Larry Kudlow, his top economic adviser, later told Fox News that the administration was already in discussions with General Motors Co. and other automakers to start producing ventilators vital to treating people affected by the virus.Industrial TransformationSuch a move to retool and shift production dramatically would echo the industrial transformation seen in the 1940s as factories moved from producing consumer goods like cars to turning out tanks and guns for the war effort on both sides of the Atlantic.But since then, experts couldn’t recall a similar synchronized shutdown in such a huge portion of the global auto industry. The closures in Europe and the U.S. announced this week follow hits the industry has taken in other big producing nations like China, Japan and South Korea.“I don’t know that there is an analog in recent history. World War II might be the best analogy,” said Kristin Dziczek, head of research at the Center for Automotive Research in Ann Arbor, Michigan. “Every automaker? Every region in the world? I don’t think that has ever happened.”Data released Thursday gave a glimpse of the deterioration that’s coming. Filings for U.S. unemployment benefits rose by 70,000 to 281,000 in the week ended March 14, according to Labor Department figures. The Federal Reserve Bank of Philadelphia’s survey of factories showed conditions in the area worsened in March by the most on record.Better ParallelTimothy Guinnane, an economic historian at Yale University, argues the better parallel may be with what came after the end of the war in 1945, specifically with post-war Germany, “where the whole country came to a halt for a few months.”Guinnane argues the shutdown now under way in Europe and the U.S. follows an encouraging example in China where life has started to return to normal after a six-week closure. Plus, he said, it’s not clear -- yet -- that there will be longer-lasting damage to the U.S. economy.“If you waved a hand and got rid of the virus tomorrow we’d be back to normal in a week,” Guinnane said. “So it’s not like a war.”That may be the hopeful view. JPMorgan Chase & Co. economists titled a note to clients about the global slowdown “The day the earth stood still.”“There is no longer doubt that the longest global expansion on record will end this quarter,” they wrote.Dziczek says a week of lost auto sales in the U.S. alone is equivalent to losing 94,400 jobs, $7.3 billion in personal income and $2 billion in tax revenue.The damage to the auto sector this time will depend on how long the shutdowns last. But the auto sector around the world, Dziczek says, is in far better shape than it was in 2008 -- when the global financial crisis led to government bailouts and a grinding crisis that saw mass layoffs and the permanent closure of many plants.Trade WarsThe shutdowns this time, however, are also coming after a bad 2019 for manufacturers around the globe. Many were battered by the impact of Trump’s trade wars and tariffs on supply chains and a slump in business investment. Europe’s industrial giant, Germany, was teetering on the edge of recession before the coronavirus crisis hit. U.S. manufacturers saw their production contract by 0.2% in 2019.The path forward looks grimmer still. China’s manufacturing output fell 15.7% in January and February from a year earlier, according to official data earlier this week. The result is that China is now expected to record its slowest growth since 1976, the year Mao Zedong died and the Cultural Revolution ended.In Germany, car companies are expected to shut down for about two weeks, leading to a significant dislocation in workers. Volkswagen AG is Europe’s largest industrial company and employs about 475,000 people on the Continent.In the U.S. the closures have spread beyond the Detroit three with Hyundai Motor Co., Honda Motor Co. and Toyota Motor Corp. announcing temporary closings Wednesday, while VW had already shuttered its Chattanooga, Tennessee, plant.Supplier NetworksAlso affected are carmakers’ vast supplier networks, already shaky as a result of the shutdown in China. Ford had been forced to shut a plant in Chicago because a seating supplier halted output to clean after a worker tested positive for the virus. At a Mercedes-Benz plant in Alabama, managers have warned that the shutdown in Europe may force production to stop soon because of a lack of parts.The impetus for the auto plant closures in the U.S. isn’t entirely economic. They came after Detroit automakers capitulated to worker demands to shutter factories because of concerns on the factory floor about the spread of the virus.GM, Ford Motor Co. and Fiat Chrysler Automobiles NV all said Wednesday they would halt production through the end of March to sanitize plants and adjust to a dropoff in auto sales.Automakers had been trying to work out a compromise with union leaders that would allow them to keep production lines running by stepping up cleaning and staggering shifts to put workers at a greater distance from each other. But that became more difficult as cases of the virus began to appear in plants.‘Scared, Frustrated’Two Fiat Chrysler workers -- one at a transmission plant in Indiana and another at a truck plant in Michigan -- had tested positive for the virus as of Wednesday, while Ford confirmed two cases among its U.S. workforce and GM has one.“Our members are scared, frustrated, and there is panic amongst them,” LaShawn English, president of UAW Local 1264, which represents Fiat workers at a Michigan stamping plant, wrote in a letter Tuesday to CEO Mike Manley. “We are pleading that you make a stance today and temporarily halt production.”Still, like other workers now confronting changed circumstances, many autoworkers are also displaying plenty of forbearance.“There’s no bad guy here. This is unchartered territory for all of us,” said Bruce Baumhower, president of UAW Local 12 in Toledo, Ohio, which represents workers at a plant producing the Jeep Wrangler SUV. “If things deteriorate more over the next two weeks, we’ll just need more time off. We just can’t put our people in that kind of environment. The jobs are tough enough to do and fully concentrate on without worrying about staying alive.”(Adds U.S. economic numbers in eighth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • What Happens to a Car Sector That Can’t Make Cars?

    What Happens to a Car Sector That Can’t Make Cars?

    (Bloomberg Opinion) -- What will become of the car industry if it cannot build cars? With car plants on both sides of the Atlantic shutting down for the next few weeks due to coronavirus, we’re about to find out.When the global financial crisis struck a decade ago, many U.S. and European carmakers idled production to prevent a build-up of unsold vehicles.This time, though, the shutdowns are happening simultaneously and slumping demand isn’t the only problem carmakers face. Workers are understandably fearful to step onto crowded production lines, plus the supply of key components risks being disrupted.Manufacturers hope the production hiatus will be brief but that could prove to be wishful thinking because the virus is a long way from being under control. (The fact that some have offered to re-purpose factory space to produce life-saving ventilators underscores the severity of this global health emergency).Even without coronavirus, 2020 was shaping up to be a difficult year for the car industry due to the massive cost of developing electric vehicles and overhauling factories to build them.Unlike a decade ago, when General Motors Co. and Chrysler sought bankruptcy protection, most carmakers have big cash piles they can draw on to tide them over a difficult period. Even after a 26 billion euros ($28 billion) cash outflow due to its diesel cheating, Volkswagen AG has 24 billion euros of cash and equivalents at its disposal.That’s fortunate, because due to high fixed costs and so-called negative working capital, much of the industry will burn through a lot of money.(1) (Besides protecting employees from potential virus exposure, one positive about closing plants is limiting the cash burn from rising vehicle inventories). In an extreme scenario Ford Motor Co and GM could each burn close to $4 billion of cash per month, say analysts at Morgan Stanley.  Meanwhile, if unemployment spikes, carmakers that lease lots vehicles via captive financial services divisions could be exposed to rising bad debts. In 2008, BMW AG had to take a 2 billion euros provision against loans going sour and falling values of used vehicles.It’s no wonder then that carmaker stocks have halved in value since the start of the year and the cost of insuring their debt against default has rocketed. Those with the weakest balance sheets have suffered most.The market capitalization of Renault SA, which struggled to generate positive free cash even before the virus showed up, has shrunk to less than 5 billion euros; adjusted for the 43% stake Renault owns in alliance partner Nissan Motor Co the equity value is negative.Jaguar Land Rover, owned by Tata Motors, is looking particularly sickly: 650 million euros of senior unsecured debt due in 2024 has tumbled to 60% of face value, yielding 17% — signalling concerns credit investors might not get all their money back.While the argument for consolidation is stronger than ever, so is the need to preserve cash. It’s questionable whether it’s still appropriate for Fiat Chrysler Automobile NV to pay its shareholders a 5.5 billion euros dividend prior to consummating a merger with Peugeot SA. Fiat’s balance sheet was already one of the weakest of the major car makers.Unlike in some service industries, car sales should eventually pick up some of the slack. Vehicles age and need replacing whereas a restaurant meal not consumed last week doesn’t necessarily mean you’ll have two the next.Plenty of folks cooped up at home will be dreaming of taking a long road trip when this is all over, encouraged no doubt by the cheaper cost of fuel.  But in the short term demand will probably fall hard – Chinese sales plunged 80% in February when much of the country was on lockdown. Consumer purchase incentives or government tax breaks probably won’t be as effective as in 2008-2009 because consumers can’t leave their homes.A car industry that can’t build cars won’t sell them. This year will see the paths of the better capitalized and financially weak firms diverge. It may not be immediate, but demands for external support, whether from taxpayers or shareholders, will come.(1) The German carmakers typically don't have negative working capital.This column does not necessarily reflect the opinion of Bloomberg LP and its owners.Chris Bryant is a Bloomberg Opinion columnist covering industrial companies. He previously worked for the Financial Times.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Odds are on Bentley Mulsanne replacement to be a flagship SUV

    Odds are on Bentley Mulsanne replacement to be a flagship SUV

    Volkswagen Group brand Porsche sells SUVs so that it can afford to pour money into its segment-defining sports cars. When the company looked at the prospects for the Mulsanne, Bentley realized that developing a four-door sedan replacement wouldn't pay off, so designers fashioned the new Flying Spur into a kind of Mulsanne Lite. In comments to various outlets over the past few weeks, including Top Gear, Car, and Car and Driver, Bentley CEO Adrian Hallmark didn't explicitly admit the arrival of a big-money crossover.

  • Bloomberg

    Europe’s Door to Joint Debt Cracks Open as Germany Softens

    (Bloomberg) -- Angela Merkel signaled she may be open to joint European Union debt issuance to help offset the impact of the coronavirus, an apparent softening of entrenched German opposition that could transform the finances of the 27-nation bloc.The unexpected opening from the leader of Europe’s dominant economy came after the chancellor and her EU counterparts agreed by video conference to restrict most travel into the continent in an unprecedented move aimed at slowing down the spread of the virus and mitigating its effects.European governments continued to mobilize resources to try to shield companies, preserve jobs and reassure investors as citizens are ordered to accept draconian curbs on daily life. With central banks almost out of ammunition, leaders are scratching their heads for ways to finance the sudden burst of spending without reviving the market turbulence that threatened to tear their currency union apart less than a decade ago.“We made clear, and actually everybody mentioned this, that we have to factor in serious, very serious, consequences for our economy,” Merkel said late Tuesday at a news conference in Berlin.EU health, interior and transport ministers are due to hold more talks on Wednesday on how to best tackle the disease and limit its wider impact.Spain and the U.K. joined Germany and France is announcing billions to support businesses at risk of going bust. French Finance Minister Bruno Le Maire even went so far as to say officials in Paris are prepared to consider nationalizing large companies if necessary. In the U.S., Donald Trump is considering an economic stimulus of as much as $1.2 trillion.“We must act like any wartime government and do whatever it takes to support our economy,” U.K. Prime Minister Boris Johnson said.The gravity of the situation is forcing policy makers to get creative, and quickly. The idea for joint EU debt issuance was raised by Italian Prime Minister Giuseppe Conte on Tuesday’s video call, according to a person familiar with the matter. Merkel said she was happy for her finance chief, Olaf Scholz -- a pro-European Social Democrat -- to explore the proposal with other ministers.Joint EU debt remained a taboo for Germany even at the height of the financial crisis after 2008, so the fact that Merkel is prepared to engage in the discussion is a sign of how concerned leaders are at the recession they are facing and the havoc it may wreak on its weaker members.‘No Conclusions’“We expect the finance ministers to discuss further on this level,” Merkel said. “I’ll talk to Olaf Scholz so that the German side can take part in this. But there are no conclusions.”Dutch Prime Minister Mark Rutte, another longstanding opponent of pooled liabilities, was more cautious on joint debt after Tuesday’s EU video conference. He said the EU has tools in place that could serve that function, and he hasn’t seen “a serious and real proposal for a coronavirus bond.”Conte reiterated that EU governments must do “whatever it takes” to deal with the crisis, adding that no country can hope to shield itself from its impact. Delaying a joint response, he added, would be lethal and irresponsible.Italy is at the epicenter of the virus outbreak in Europe. For many policy makers, the country was already the bloc’s riskiest member: it has a bigger debt load than any country but Greece, growth has been moribund since it joined the euro, and the size of its economy makes the prospect of a bailout daunting.Weak LinkFrance backed Italy’s request and wants the European Investment Bank to issue the bonds, possibly with guarantees by the European Stability Mechanism, the euro-area bailout fund, an official familiar with the matter said.Conte said that the EU must ensure that citizens receive the care they need and that their economic and social conditions are protected, according to the person familiar with the call. He said a European guarantee fund could be an alternative way to ensure the financing of relief measures.EU leaders also discussed ways the ESM could deploy its 410 billion-euro firepower. During that discussion, Merkel cautioned that it would be difficult to use money from the bailout fund without any conditions attached, while Rutte was even more skeptical, according to an EU official with knowledge of the exchange. Still, neither of them shot down the idea, the official said.More LockdownsIn other developments Tuesday, Belgium drastically tightened its restrictions on citizens, banning all unnecessary movements, keeping only food stores and pharmacies open for customers. Brussels, its capital, is home to the EU’s executive arm and NATO.The EU also closed its external borders for 30 days. The restrictions will be implemented by member countries over the coming hours. In theory, the ban does not apply to the U.K., but in practice any form of travel has become virtually impossible.The virus is not just rewiring people’s lives, but also forcing businesses to rethink how they operate.Europe’s biggest industrial manufacturers from Volkswagen AG to Airbus SE took unprecedented steps to idle plants across the region. Carmakers PSA Group, Fiat Chrysler Automobiles NV and Renault SA are also suspending production, and Mercedes-Benz maker Daimler AG said its halts would affect car, van and truck plants.BMW AG on Wednesday abandoned hopes for another record year in sales, predicting deliveries will be “significantly below” 2019 levels and profitability the weakest for years. The German carmaker skirted plant shutdowns and instead will rely on shorter shifts and flexible working to rein in output.(Updates with ministers’ talks in fifth paragraph, BMW in final paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.