German automotive giant BMW has lowered its guidance for the year due to coronavirus, the firm announced today, saying the pandemic would “seriously dampen demand” across all of its markets.
The Munich-headquartered company said that its earnings margin for the year would fall to zero to three per cent, down from the two to four per cent previously forecast.
The warning comes despite the fact the automaker actually recorded a 133 per cent rise in profit for the first quarter.
Earnings for the period totalled €1.4bn (£1.2bn) compared with €589m last year, but the increase was largely due to a one-off provision of €1.4bn which weighed down last year’s results.
In a statement, BMW said: “The BMW Group still expects the spread of the coronavirus and the necessary containment measures to seriously dampen demand across all major markets over the entire year 2020”.
The firm added that it expected to make a loss in the second quarter as the consequences of coronavirus continue to be felt.
Despite cutting capital spending plans, the firm also said that it was unlikely to hit its target of achieving positive cash flow in 2020.
The carmaker is extending a €12bn plan to save costs, but did not give further details.
The coronavirus pandemic has decimated demand for cars around the world, with showrooms shuttered and production halted.
BMW said that deliveries of vehicles had dropped by over a fifth in the first quarter, to 477,111 cars.