BMW sales plunge in Q1 as coronavirus takes toll
German carmaker is planning ahead and adjusting production
BMW is expecting a further decline in global demand as the coronavirus outbreak takes its toll, a spokesman said on Monday, after the German carmaker reported a 20.6 percent drop in first quarter sales to 477,111 vehicles.
BMW said it had seen sales growth at the start of the year. Since then, the pandemic has pushed some firms, including carmakers, to halt production at some sites and many governments around the world have introduced lockdown measures in a bid to slow the spread of the virus.
“By February, the impact of the pandemic had already led to a significant decrease in sales in China. By March, the effects of the pandemic were clearly visible in sales figures in Europe and the US,” BMW said in a statement.
BMW sales
to China, where the outbreak started, were down 30.9 percent in the January to March period. They dropped by 18.3 percent in Europe and by 17.4 percent in the US.
A production stoppage at BMW’s factories is being extended by two weeks until April 30, a spokesman said, adding the time was being used to modify factories — a task that is keeping several thousand employees busy.
BMW is responding to an expected further downturn in demand by planning ahead and adjusting production, a spokesman said.
He added that while fundamental demand was still there, the closure of retail outlets meant customers were not ordering and receiving cars like they do normally so it would take longer for markets to recover.
BMW said around 80 percent of retail outlets in Europe and 70 percent in the US were temporarily shut due to the pandemic.
Export expectations in Germany’s car sector have fallen to their lowest level since March 2009, when Europe’s largest economy was in the throes of the global financial crisis, Germany’s Ifo institute said on Monday.
Also on Monday, industry data showed new car sales in Britain dived 44 percent last month as the country’s lockdown triggered by the coronavirus outbreak shut show rooms.
It comes as UK-based research group, the Center for Economics and Business Research (CEBR), estimated that Britain’s lockdown was costing its economy more that £2.4 billion ($2.9 billion, €2.7 billion) per day in lost output across all main sectors.
The Society of Motor Manufacturers and Traders, meanwhile, said that UK car sales suffered the worst March since the late 1990s.
“In the important plate change month, 203,370 fewer cars were registered than in March 2019, as showrooms closed in line with government advice to contain the spread of the coronavirus,” the SMMT said in a statement.
“The performance represented a steeper fall than during the 2009 financial crisis,” it added.
Sales are normally boosted by the twice-a-year number plate change that occurs in March and September. SMMT chief executive Mike Hawes said the data represented “a stark realization of what happens when economies grind to a halt.” It comes as the CEBR said Britain’s “lockdown is leading to a reduction in economic output of 31 percent.”
BACKGROUND
Export expectations in Germany’s car sector have fallen to their lowest level since March 2009, when Europe’s largest economy was in the throes of the global financial crisis, Germany’s Ifo institute said.