November 30, 2021

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Covid-19 will slow car industry ‘for quite some time’

Car maker BMW warned the industry would be held back by the coronavirus outbreak “for quite some time to come” as it posted first-quarter results.

Net profit fell slightly in Q1 from a year earlier, when the company had a large one-time expense.

The company said it expected earnings to deteriorate during the first half of this year due to the coronavirus lockdowns.

The firm said it remained financially solid with 19 billion euros (£16.5 billion) in cash at the end of the first quarter.

Net profit fell 2.4% to 574 million euros (£497 million) in the first three months of the year, down from 588 million euros (£509 million) in the first quarter of 2019, the company said.

The year-earlier figure was lowered by a 1.4-billion euro (£1.2 billion) charge stemming from a European Union anti-trust case.

Car sales fell 21% in the quarter as first China and then Europe and the United States saw dealerships close during the outbreak.

Earnings were supported by a favourable product mix in which vehicles with higher profit margins dominated.

It said sales this year would be substantially below last year and that a quick recovery “is unlikely” as the situation would only begin to stabilise in the third quarter.

The company said it expected profit margins of 0%-3% for the full year, reduced from an earlier outlook of 2%-4%.

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