BMW expects COVID-19 hit, shares down

BMW expects COVID-19 hit, shares down

BMW expects COVID-19 hit, shares down

BMW Group (ETR:BMW) shares dropped on Wednesday after the company issued a statement concerning to the evolving COVID-19 outbreak.

Shares in the German company were down by almost 6% during Wednesday morning trade.

BMW said that the uncertainty surrounding the spread of COVID-19 makes it difficult to accurately forecast the group’s business performance for the 2020 financial year.

As the virus continues to spread and containment measures begin to be implemented, BMW is expecting a negative impact on delivery volumes in all major markets across the 2020 year as a whole.

Additionally, the group said that automotive segment deliveries to customers worldwide in 2020 will be significantly lower than the level from the year prior.

EBIT margin of the automotive segment is expected to lie within a range of 2% to 4%, BMW added.

The company continued to add that it expects group profit before tax to be “significantly lower” than in 2019.

“Solidarity and responsible action are called for. In our society it is the duty of the strong to protect the weak. The BMW Group therefore fully supports the measures aimed at containing the spread of coronavirus,” the Chairman of the Board of Management of BMW, Oliver Zipse, said concerning the spread of COVID-19.

Oliver Zipse continued: “We take our responsibility seriously, both when it comes to ensuring the protection and health of our employees and to achieving the best possible balance in terms of profitability. One thing is certain: coronavirus is here now, but there will also be a time after coronavirus. The approach we are taking clearly reflects the BMW Group’s ability to react quickly and flexibly.”

“New technologies are key to the future of mobility. Up to 2025, we intend to invest more than 30 billion euros in research and development to underscore our position as an innovation leader. This also expresses our confidence for the future business development,” Oliver Zipse said.

This week, the British government accelerated measures to respond to the outbreak of COVID-19.

Shares in BMW AG (ETR:BMW) were down on Wednesday, trading at -6.44% as of 10:04 CET.