BMW joins peers with warning of virus profit slump

MUNICH: BMW AG lowered its profit outlook for the year as the German carmaker said the fallout from the coronavirus pandemic, which continues to disrupt production and sales in markets from Europe to North America, is lasting longer than expected.

BMW now sees an earnings before interest and taxes margin for the automotive segment of between 0% and 3%, from 2% to 4% earlier, the company said late Tuesday.

The new outlook is a sign that BMW is bracing for tough times after carmakers from Ford Motor Co to Daimler AG forecast falling profit in the past days because of the pandemic.

The crisis is hitting BMW and its peers at a sensitive time – manufacturers are ramping up spending on electric vehicles to meet tougher emissions regulations and need profits from conventional cars to fund those investments.

BMW is the last European carmaker to report, and yesterday provided more detailed earnings figures. Group sales and operating profit climbed in the first quarter because of several negative one-time effects in the previous-year period. BMW’S automotive sales, a key metric watched closely by analysts, fell 6.4% amid showroom closures in March.

Car sales won’t return to normal in the coming weeks and the second quarter will be worse than the first three months of the year, BMW said. Both Fiat Chrysler Automobiles NV and Volkswagen AG expect to lose money in the period from April through June. —