Covid sales slowdown hits BMW for record loss
Carmaker says sales are recovering and it expects full-year profit
BMW posted a pretax loss of €498 million, its first in over 11 years, and an operating loss of €666 million for the quarter. Photograph: Christof Stache/AFP via Getty Images
BMW expects to make a profit this year if demand continues to recover, despite posting a record loss for its car division in the second quarter after sales slumped 25 per cent because of coronavirus lockdowns, it said on Wednesday.
The German manufacturer of BMWs, Minis and Rolls-Royces said sales had started to recover during the latest three-month period, including a 17 per cent jump in deliveries in China, but the rebound would not fully make up for sales lost to Covid-19.
As a result of the sales slide, and higher costs for developing low-emission cars, BMW posted a pretax loss of €498 million, its first in over 11 years, and an operating loss of €666 million for the quarter.
Shares in BMW fell 3 per cent following the results, with some analysts saying they had not expected such a big loss in earnings before interest and taxes (Ebit).
BMW said, however, that its outlook did not factor in the potential impact of a second wave of Covid-19 infections, nor the prospect of a more sustained or deeper recession than expected in its key markets.
Chief executive Oliver Zipse said Covid developments in the United States were “extremely worrying”. Sales in the US made up 12.6 per cent of deliveries in the first half of 2020, down from 15.2 per cent in 2020.
Overall, BMW said it expected global demand for luxury cars to fall by a fifth this year.
BMW reiterated that it expected to make a pretax profit in 2020, albeit well below 2019 levels and for car deliveries to customers to fall significantly this year. – Reuters