FRANKFURT -- Volkswagen brand has abandoned hopes of achieving its goal of breaking even in the U.S. this year because of the coronavirus outbreak.
Under VW Group CEO Herbert Diess' restructuring plan presented in 2016, all the company's money-losing regions including the U.S. were slated to return to the black this year.
In a conference call with reporters, VW Group CFO Frank Witter said the economic slump stemming from the pandemic had forced it to postpone its goal for the U.S. market.
"We were well on our way to reaching our target of a breakeven for the VW passenger car brand in the USA in 2020," Witter said. "Due to the coronavirus, it naturally won't be possible to meet this now, unfortunately. It's a setback, but it doesn't change our basic aspiration."
The coronavirus pandemic has forced VW to halt production at its U.S. plant in Chattanooga for an indefinite period.
VW brand's U.S. vehicle sales fell 13 percent to just over 75,000 in the first quarter, according to company's web site. A 42 percent drop in March wiped out gains in the preceding two months.
VW has struggled for years to turn around its business in the U.S.
It closed its first plant in Westmoreland, Pa., near Pittsburgh in 1988. In 2011, the automaker started production again in the U.S. in Chattanooga, Tenn., with Passat sedans tailored for the U.S. market. VW hoped it could achieve profitability by hedging its foreign exchange exposure through a return to local manufacturing.
VW's initial modest sales success after Chattanooga opened was damaged in 2015 when U.S. regulators uncovered the automaker's use of illegal engine management software to cheat diesel-emissions tests.
Some analysts called for VW to exit the U.S. market after the diesel scandal broke but instead, the automaker has doubled down, expanding production at Chattanooga to include the Atlas crossover.
The plant is being expanded to build full-electric crossovers, with production scheduled to start in 2022.