VW’s 2020 profit better than expected

Volkswagen said Friday that it made a better than expected profit of 8.8 billion euros, or $10.7 billion, after taxes in 2020 despite the pandemic. The world’s No. 2 automaker said the rapid recovery of China, its largest single market, and resilient sales of luxury vehicles helped the bottom line.

The company gave an upbeat outlook for this year, saying it would carry momentum from the stronger second half of the year into earnings going forward. It said it was striving for earnings in the top part of its forecast range of 5 percent to 6.5 percent returns on sales, and it predicted that sales revenue would be “significantly higher,” assuming successful containment of the COVID-19 pandemic.

The earnings figure was off 37 percent from 2019. Sales revenue was down 11.8 percent at 222.9 billion euros, but it fell less than the 16.4 percent drop in unit sales to 9.2 million vehicles. That meant Volkswagen surrendered the title of biggest carmaker by volume, which it had held since 2016, to Toyota. The Japanese automaker sold 9.5 million vehicles.

Volkswagen common shares traded 1.2 percent higher after the earnings statement.