BMW reports first quarterly loss since 2009August 5, 2020
The loss of the BMW Group’s automotive division, for the first time in more than a decade, left the company at a loss in a difficult quarter for European carmakers hit by the coronavirus pandemic.
BMW lost 666 million euros before interest and taxes between April and June, its first quarterly loss since the 2009 financial crisis. Note that for the same period in 2019, the company showed a profit of 2.2 billion euros.
Earnings before interest and taxes (EBIT) in the company’s auto segment declined to a negative 10% in the quarter, compared with a 6.5% gain in the second quarter of last year, as BMW increased investment in high-priced electric vehicle technology and new car shipments fell by 25% per quarter.
BMW is the last German car manufacturer to report after a tough quarter for automakers. Volkswagen Group has lost 2.4 billion euros and cut dividends, while Daimler claims that the group weathered the pandemic but still needs to cut tens of thousands of jobs.
“We are now cautiously optimistic about the future in the second half of the year and continue to strive for an EBIT margin of 0-3% for our automotive segment in 2020,” BMW CEO Oliver Zipse said in a statement.
Sales have begun to recover in some markets, including China, which prompts BMW to expect its core business to be profitable, but this recovery will not be enough to fill the gap in sales lost to the pandemic.
BMW will begin production of the iX3 electric SUV in China this year, so there are high hopes for the model.
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