Volkswagen Hit by Supply-Chain Disruption in Europe

By William Boston

BERLIN--Volkswagen AG, the world's biggest auto maker by sales, said Monday that it is becoming difficult to maintain production in its European plants as the spreading coronavirus disrupts suppliers and national governments declare emergencies.

The situation in Europe is a stark contrast to the company's manufacturing base in China, where 31 of its 33 factories are now back on line after weeks of being closed as the coronavirus pandemic gripped the country.

"While the situation in China is stabilizing, it is becoming more difficult in Europe," said Joern Roggenbuck, a Volkswagen spokesman. "It is becoming more complicated to maintain supply chains."

Volkswagen's Lamborghini and Bugatti plants in Italy have halted production. In the wake of the Spanish government's declaration of a state of emergency Volkswagen factories in Martorell and Navarra have shut down. The plants produce vehicles for SEAT and other Volkswagen passenger car brands.

In the Czech Republic, which has also implemented strict measures to stop the spread of the virus, Volkswagen unit Skoda is maintaining production with difficulty, but has not yet shut down, the spokesman said.

Volkswagen sales in Western Europe fell 3.5% to 263,800 vehicles in February, and fell 7% to 56,900 vehicles in Central and Eastern Europe. These figures still represent the period before the virus hit Italy with full force and began to spread more rapidly in Europe.

In China, Volkswagen sales at the height of the virus outbreak in February, collapsed 74% to 60,900 vehicles from 234,400 vehicles the year before.

Write to William Boston at [e-mail]

(END) Dow Jones Newswires

March 16, 2020 05:16 ET (09:16 GMT)

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