3:40 pm, May 6, 2020
BMW saw its net profit dip by 2.4 per cent to 574m euros during the first quarter of 2020, it reported today (May 6) and warned the pandemic would hold the industry back ‘for quite some time to come’.
The figure – equivalent to circa £497m – is down from 588m euros (circa £509m) during the same period last year, when it also had a large one-time expense stemming from a European Union anti-trust case that cost it 1.4bn euros (circa £1.2bn).
The company is expecting its earnings to worsen during the first six months of this year because of the lockdowns.
However, it added that it was still financially solid, with 19 billion euros (circa £16.5bn) in cash at the end of March.
Its sales fell by more than a fifth (21 per cent) between January and March as dealerships closed in China then Europe and the USA because of Covid-19.
The manufacturer said sales this year would be substantially lower than last year and that a quick recovery ‘is unlikely’ since things would only start to stabilise in the third quarter.
It is expecting profit margins of zero to three per cent for the full year – down from an earlier prediction of two to four per cent.
The news comes as General Motors reported a first-quarter profit drop of 88 per cent to $247m (circa £198m), with revenue sliding by six per cent to $32.7bn (circa £26.2bn).
The Detroit-based manufacturer, which also withdrew its financial guidance for the rest of the year, said it was looking to resume production at most of its US and Canadian factories on May 18. Ford and Chrysler are likely to follow suit that day as well.
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