BMW expects significant drop in deliveries in 2020

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Full year car deliveries of BMW were expected to be "significantly down year-on-year," the German carmaker stated in its financial report for the first quarter (Q1) presented on Wednesday.

BMW Group continued to expect the spread of coronavirus and the necessary containment measures to "seriously dampen demand across all major markets over the entire year 2020."

"We are gradually ramping up our production again according to demand in each market. However, we are monitoring developments extremely closely to be able to respond with maximum flexibility," said Oliver Zipse, chairman of the board of management (CEO) of BMW in Munich.

In Q1, revenues still increased slightly by 3.5 percent year-on-year to 23.25 billion euros (25.14 billion U.S. dollars), and BMW achieved profits before financial result of 1.38 billion euros, more than twice as much as in Q1 2019 when results had been negatively impacted by ongoing antitrust proceedings.

BMW had "bolstered its already strong liquidity position by increasing liquid funds to almost 19 billion euros at the end of the quarter," said Nicolas Peter, member of the board of management of BMW, stressing that the company had the "best credit rating of all European carmakers and the second-best worldwide."

In the first three months of the year, BMW brand deliveries had already decreased by more than 20 percent to a total of 411,809 vehicles. Subsidiaries MINI and Rolls-Royce Motor Cars sold 64,449 and 853 vehicles respectively, both decreasing by more than 20 percent.

On Tuesday, BMW announced that it would update its guidance for the financial year 2020. Currently, the German carmaker is expecting the "highest negative impact" of the coronavirus pandemic in the second quarter of 2020.

In several markets, governmental measures to contain the coronavirus pandemic were lasting longer, resulting in a "broader negative impact than was foreseeable in mid-March," BMW noted.

"Delivery volumes in these markets will not as was previously assumed return to normal within a few weeks," said BMW. The economic shifts that were caused by the pandemic would make it difficult to provide a "reliable forecast."

"Quite clearly, the situation remains serious and market forecasts are subject to constraints under these circumstances," said Zipse. In this situation, BMW was keeping a "tight rein on inventory levels because liquidity has absolute priority."

Following the announcement, BMW was at the bottom of the DAX index of the country's 30 largest listed companies, with shares losing more than 3.5 percent on late trading on Wednesday.

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