BMW reports massive drop in profits for 2020

The week-long standstill in spring ruined BMW 2020 balance sheet. The decline was only slowed by the improvement in business in China, where economic and public life, shaped by the virus pandemic, returned to normal faster than in the rest of the world. Net profit fell by 23 percent to 3.9 billion euros, and sales by five percent to just under 99 billion euros, as the automaker announced. BMW sold significantly fewer cars than in the previous year, despite growth in the second half of the year. With a total of 2.3 million vehicles, worldwide deliveries were 8.4 percent below the value in 2019. For Europe, the group registered a significant decrease with a minus of 15.5 percent to almost 914,000 vehicles, as did the USA with minus 18 .1 percent to just under 308,000 vehicles. In China, the Group's largest sales market, by contrast, with more than 778,000 units, 7.4 percent more vehicles were sold than in the previous year. At 2.7 percent, the profit margin was below the level of the previous year and far from the long-term goal of eight to ten percent. On the stock exchange, the shares increased their losses. One dealer pointed out that the margins in the auto business were a bit disappointing. NordLB expert Frank Schwope said that with a view to the pandemic, BMW had presented quite strong figures. "Although the earnings figures were slightly below market expectations, they are likely to be less informative than ever, especially with regard to the upheavals caused by Corona. In any case, premium is doing better than mass in the pandemic." The French manufacturer Renault, which is more geared towards the mass market, had to cope with a significantly higher drop in sales. Business picked up, especially in the second half of the year. BMW is therefore hoping for a stronger performance in the current year. The second half of the year has shown how powerful BMW is, said CEO Oliver Zipse. In the second half of the year, the Munich-based company brought in a pre-tax profit of a good 4.7 billion euros, which is almost ten percent more than a year ago. Deliveries also increased during the period, with high-yield models in particular in demand. In order to save costs, BMW reduced its investments in property, plant and equipment by almost a third, and spending on research and development was also below the previous year's level. The focus of development is now on the areas of vehicle connectivity and automated driving as well as e-mobility, explained the Munich-based company. This year alone, five fully electric models from BMW and Mini should be available on the market. At the same time, combustion engines are gradually moving into the background. As electrification progresses, up to 50 percent of today's drive variants should be eliminated by 2025, the car manufacturer announced.