Last checked at (Sharecast News) - Volkswagen announced on Tuesday it was preparing to halt production in Europe due to the fallout of the coronavirus epidemic on its finances.
The announcement comes shortly after it warned that 2020 would be a "very difficult year," with the coronavirus outbreak posing "unknown operational and financial challenges."
Speaking to reporters on Tuesday, Chief Executive Herbert Diess said the company would shut down production at factories operated by the group's brands "in the near future," with most European plants set to suspend work for at least two weeks.
Production at Volkswagen plants in Spain, Slovakia and Italy would all be halted before the end of the week, Diess added.
Volkswagen's works council concluded it's not possible for workers at its plants to maintain a safe distance from one another to prevent contagion and recommended a suspension of production from Friday.
"The spread of coronavirus is currently impacting the global economy. It is uncertain how severely or for how long this will also affect the Volkswagen Group," Frank Witter, chief financial officer at Volkswagen, said in a statement Tuesday.
"Currently, it is almost impossible to make a reliable forecast. We are making full use of all measures in task force mode to support our employees and their families and to stabilize our business," he added.
Volkswagen Group also said its full-year operating profit rose 22% to €16.9bn ($18.5 bn) thanks to strong sales of higher-margin cars and lower diesel charges.
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