Sales fell by 20.6%, BMW's first quarter revenue still shows positive growth

In March of this year, BMW’s 2019 financial report meeting, BMW Chief Financial Officer Dr. Peter said, “The first half of 2020 will be very challenging.”

His “challenge” was exposed in BMW’s first quarter earnings report.

On May 7, the BMW Group released its first quarter earnings report for 2020. According to the financial report data, in the first quarter of this year, the BMW Group achieved revenue of 23.25 billion euros (approximately RMB 178.3 billion), a slight increase of 3.5% year-on-year; net profit of 574 million euros, a decrease of 2.4% year-on-year; profit before interest and tax was 1.38 billion The euro was up 133% from the 589 million euros in the same period last year.

The BMW Group said in its financial report that the core reason for the sharp increase in pre-interest and tax profits is that the BMW Group paid 1.4 billion euros of EU antitrust fines in the first quarter of last year, resulting in a lower base in the same period last year.

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In terms of sales volume, the BMW Group delivered a total of 471,700 new BMW, MINI and Rolls-Royce vehicles worldwide in the first quarter, a year-on-year decline of 20.6%.

Among them, the BMW brand delivered a total of 411,800 new vehicles, down 20.1% year-on-year; the MINI brand delivered 64,449 new vehicles, down 23.4% year-on-year; Rolls-Royce delivered 853 new cars, down 27.2% year-on-year. In terms of new energy vehicles, BMW delivered a total of 30,692 electric vehicles in the first quarter, a year-on-year increase of 13.9%.

Although sales of the automotive business declined, the BMW Group still achieved positive revenue growth due to the development of its non-automotive business such as financial services.

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The decline in BMW sales is the epitome of the global car market’s slump under the influence of the epidemic.

According to data from the European Automobile Manufacturers Association, new car sales in the passenger car market in the European Union fell by 25.6% year-on-year in the first quarter of this year, and in March it fell 55.1%. In China, car sales in the first quarter were 3.672 million units, a 42.4% decline from the same period last year. In the US market, JDPower estimates that sales in the first quarter fell by about 32%.

BMW Group said that the impact of the new crown epidemic may continue to erode market demand and profits.

This is full of challenges for BMW, which is in an accelerated period of electrification transformation. In 2019, the BMW Group’s R & D expenses have exceeded 5 billion euros for five consecutive years. Zipzer, chairman of the BMW Group, said that before 2025, BMW will also invest more than 30 billion euros in research and development to promote the company’s transformation to the new four.

However, BMW’s electrification process will not be forced to “speed down” due to the spread of the epidemic. Zipzer said that the BMW Group will continue to promote the development of electrification, driverless technology and hydrogen fuel cell technology.

However, because Europe is in the outbreak stage of the epidemic, and car sales may continue to remain at a standstill, the BMW Group expects that the negative impact will be the highest in the second quarter of 2020. On May 5, the BMW Group lowered its full-year financial forecast: the profit margin of the automotive business unit may fall to between 0% and 3%, compared with the previous forecast of 2% to 4%.

“We are gradually re-increasing production according to the needs of various markets,” Zipzer said. “In this case, liquidity is absolutely a priority.”

Peter said: “We will temporarily shelve certain projects.” BMW plans to reduce the amount of investment in 2020 from the previously planned 5.7 billion euros to “less than 4 billion euros.”