(Adds comments from CFO regarding expectation for EBIT margin before the pandemic)

 

By Jessica Sier

 

BMW AG on Wednesday revised its margin guidance down as the spread of coronavirus continues to damage global supply chains and consumer demand.

The German luxury car maker expects its key profitability metric--the margin on earnings before interest and taxes in its automotive segment--to slump to between 2% and 4% in 2020. This is below a previous expectation of 6% to 8%, Chief Financial Officer Nicolas Peter said.

BMW said 2020 pretax profit will be significantly lower than in 2019. Delivery volumes to all major markets will also be lower in 2020, particularly the automotive segment, the company said. Uncertainty regarding the effects of the coronavirus pandemic makes it difficult to accurately forecast its performance for 2020, it added.

"Based on the latest developments, the BMW group expects the spread of coronavirus and the required containment measures to have a negative impact on delivery volumes in all major markets over the year 2020 as a whole," the company said in a statement.

The guidance comes as most major car manufacturers and their suppliers suspend operations in plants across Europe.

 

Write to Jessica Sier at jessica.sier@wsj.com

 

(END) Dow Jones Newswires

March 18, 2020 07:14 ET (11:14 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
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