BMW says sales in the second quarter are likely to remain under pressure

BMW
had recently reported a massive 20.6% decline in its sales in the first quarter
to 477,111 vehicles. In its announcement on Monday, the German multinational
luxury car manufacturer highlighted that its sales in the second quarter are
likely to remain under pressure as the Coronavirus pandemic weighs heavily on
global demand.

According
to BMW, sales were seen rallying up at the start of 2020. Starting from
February, however, the health crisis pushed many factories into suspending
operations and governments from across the globe resorting to nationwide
lockdowns to minimize the fast-spread of the flu-like virus. The strategies, as
per the company, fueled a reduction in demand and consequently fewer sales for
BMW vehicles. BMW said:

“By
February, the impact of the pandemic had already led to a significant decrease
in sales in China. By March, the effects of the pandemic were clearly visible
in sales figures in Europe and the U.S.”

BMW
Sales Declined 30.9% In China

As
per the regional figures, BMW saw an unprecedented 30.9% decline in sales in
mainland China in the first three months of 2020. The company recorded an 18.3%
decline in sales in Europe while its sales were reported 17.4% down in the
United States.

According
to BMW’s spokesperson, the company has decided to extend the shutdown of its
factories by two weeks. The
car manufacturer is now expected to resume operations on April 30^th.
BMW also added that its factories are utilizing the time to undertake the
pending modifications.  The task is currently
keeping several thousand of its workers busy.

BMW’s
spokesman also accentuated in his statement that the company wishes to brace
for the upcoming decline in sales via timely planning and adequate adjustments
to production. He also said that despite the fundamental demand in place for
BMW, customers are unable to receive vehicles or place new orders as the retail
outlets remain closed amidst the health emergency. This may suggest that the
market is likely to take more time to recover.

BMW Closed 70% Of Its Retail Outlets In Europe

The
German luxury car manufacturer has temporarily shut down 70% of its retail
outlets in the United States and an even
broader 80% outlets in Europe.

BMW
jumped around 7% in the stock market on Monday morning. At £41.50 per share,
the stock is currently around 35% down year to date. BMW has a market cap of £27.16
billion and a price to earnings ratio of 6.40.