The Strategist

Global automakers lose $ 250 billion in revenue due to pandemic

08/31/2020 - 03:11

Global automakers lost about $ 250 billion in revenues in the first half of this year due to the coronavirus pandemic, which led to the suspension of production and significantly hit demand. This follows from the reporting of companies, which was analyzed by the Dow Jones.

Helgi Halldórsson
Helgi Halldórsson
As a result of the pandemic, automakers around the world are facing one of the most severe crises in recent history. While some expect the situation to improve in the second half of the year, the pandemic has added to the challenges the industry is already facing, including sluggish demand and rising costs for new technologies.

Toyota Motor Corp. and Volkswagen AG, the world's two largest automakers by sales volume, suffered the largest losses in terms of revenue in the first half of the year. Together, they lost $ 69.61 billion compared to the same period last year, when the total losses of 19 global automakers, the indicators of which were analyzed by Dow Jones, amounted to $ 246.20 billion.

Volkswagen, which makes cars under the brand of the same name and brands such as Audi and Porsche, earned $ 34.17 billion in revenue in six months from the same period last year.

“The first half of 2020 was one of the most challenging in our company's history due to the COVID-19 pandemic,” Volkswagen CFO Frank Witter said when the company released its second quarter results in late July.

French Renault SA lost $ 11.35 billion in revenue and reported a record net loss of $ 8.63 billion in the first half.

“We are in a difficult, difficult situation. We are all in it. However, Renault took the blow from COVID, already being in an unstable situation, so, of course, it is even more difficult for us,” said the company’s CEO Luca de Meo.

American automakers have also been hit by the pandemic. Ford Motor, General Motors and Fiat Chrysler Automobiles NV collectively lost $ 69.29 billion in revenue in the first half of the year, with Ford accounting for the largest losses.

Meanwhile, not all companies have found themselves in such a predicament. Tesla sales fell in the second quarter, but revenue growth in the first three months of the year helped offset the decline. Thus, the electric car manufacturer increased its revenue in the first half of the year by more than $ 1 billion.