In the same period last year, profit before taxes stood at 9.6 billion euros.

In the second quarter, Volkswagen made a net loss attributable to shareholders of 1.6 billion euros, down from a net profit of almost 4 billion in the same three-month period of 2019.

After production lines came to a halt, mainly in March and April, and with demand for new cars having plummeted in Europe and North America, Volkswagen says revenue dropped by 23 per cent to 96 billion euros.

Deliveries in the first half of 2020 were down by 27 per cent year-on-year to 3.9 million vehicles, with the carmaker reporting that percentage decline has been decreasing consistently since May.

Management are seeking to reduce a dividend proposed last year by 1.70 euros, to 4.86 euros for preferred shares and 4.80 euros for ordinary shares, according to a statement from VW.

The German auto giant’s operating result before special items dropped to minus 0.8 billion euros in the first six months of the year, a slightly better result than analysts had expected.

But it was still a severe drop compared to the same period last year, when Volkswagen reported earnings of 10 billion euros.

The Wolfsburg-based company is, however, maintaining its business outlook for 2020, with the operating result expected to be significantly down on the previous year, but still in the black.

“The first half of 2020 was one of the most challenging in the history of our company due to the Covid-19 pandemic,” said Frank Witter, VW board member for finance and information technology.

He said Volkswagen is “cautiously optimistic” about the second half of the year.

Volkswagen’s Porsche subsidiary also announced plans to cut dividends in the wake of the heavy losses, with management proposing a cut of .90 euro cents to both preferred and ordinary shares, reducing them to 2.21 and 2.204 euros, respectively.

A final agreement is expected at the Stuttgart-based company’s annual general meeting, which has now been rescheduled to October 2 and will take place online due to the pandemic, a statement said.

Volkswagen is to hold its AGM online on September 30.

Porsche AG also saw profits collapse in the first half of the year, when the Stuttgart-based luxury carmaker’s operating result plunged by over a quarter to around 1.2 billion euros.

With revenue of around 12.4 billion euros, the return on sales was just under 10 per cent – short of Porsche’s goal of at least 15 per cent.