Pandemic does not allow the manufacturer to make an accurate forecast.
In the current year, BMW expects significant decline in profit before tax (EBIT) and reduction of volumes of deliveries of vehicles worldwide compared to the 2019 year. Given that at the same time increase spending on research and development, the profit margin of the group in the automotive segment will fall significantly. Profitability will be the lowest in many years. About it reports Automotive News Europe.
The main reason is the continuing pandemic of coronavirus that hit almost all sectors of the global economy, including the auto industry. The Bavarians have already abandoned hopes for another record breaking year and preparing to stop their own factories in Europe and in Rosline (South Africa) until April 19. This will avoid overstocking of warehouses due to lower demand and will measure in the fight against the further spread of the virus. Forced vacation will begin this weekend.
BMW representatives say that it is not currently possible to predict further spread and impact of coronavirus, but because it is impossible to give an accurate forecast for 2020. However, it is now clear that supply reduction will affect all major markets. Based on recent calculations, the experts expect that EBIT in the automotive business segment will be in the range of 2-4%. Earlier this month the company said that in 2019, operating income decreased from 7.2% to 4.9% due to development costs and production costs. While last year was a record for the group by revenue – it for the first time exceeded 100 billion euros.
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