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BMW AG has said the impact of the coronavirus will likely hurt demand throughout the year, and has lowered its profit outlook for passenger cars.
The Munich-based firm forecast its full-year automotive earnings before interest and taxes (EBIT) margin to fall to 0-3 per cent, versus the 2-4 per cent range estimated before demand was affected by government movement restrictions to slow down the coronavirus outbreak.
“The BMW Group still expects the spread of the coronavirus and the necessary containment measures to seriously dampen demand across all major markets over the entire year 2020,” the company stated.
The carmaker reported a 133 per cent rise in first-quarter profit to €1.38bn ($1.50bn, £1.2bn) compared with €589m in the same period a year earlier, when the result was pulled down by a €1.4bn provision.
Its automotive EBIT margin rose to 1.3 per cent from -1.6 per cent.
Last week, Tesla said its automotive gross margin rose to 25.5 per cent in the first quarter from 20.2 per cent a year earlier, due to a 40 per cent rise in deliveries, helped by demand for its Model Y crossover utility vehicle.
By contrast, BMW’s passenger car deliveries fell 20.6 per cent to 477,111 cars in a quarter.
Sales of BMW’s X series of SUVs rose 21 per cent last year, making up 44 per cent of the brand’s global total, forcing the carmaker to increase spending on hybrid petrol-electric and pure electric vehicle technology to meet emissions rules.
BMW’s 2021 target is an EU fleet average of 102.5 grams of CO2 per kilometre. Last year, its average fell just 1 gram from a year earlier to 127 grams, while research and development spending left its automotive EBIT margin at 4.9 per cent.
