BMW profits slump on pandemic shutdowns

China's high demand was instrumental in helping BMW recover from losses at the beginning of the lockdown restrictions

Picture: AFP

FRANKFURT AM MAIN - German luxury carmaker BMW reported on Thursday a plunge in net profits for 2020 as coronavirus shutdowns closed dealerships and sapped sales in the early days of the pandemic.

The Munich-based company reported annual net profits of just under $4.6 billion, a 23% drop on 2019, it said in a statement.

Revenues at the group, which also includes the Mini and Rolls Royce brands, fell 5% to 99 billion euros, it said in a statement.

EASED RESTRICTIONS

Most of the damage was done in the first half of the year, when governments around the world imposed restrictions to slow the spread of COVID-19, leaving showrooms closed and disrupting factory lines.

A relaxing of restrictions, later on, helped BMW to pick up "growth momentum" in recent months, said chief financial officers Nicolas Peter, putting the group "in a favourable starting position to make 2021 a more profitable year".

BMW BENEFITS FROM CHINA’S STRONG DEMAND

The group benefited in the second half of 2020 from strong demand in China, the world's largest market for cars, as the Asian giant rebounded faster than other countries from the pandemic shock.

Chinese car deliveries climbed by more than seven per cent, helping to offset falling sales in the United States and Europe, the BMW group said.

Earnings were powered by robust demand for high-profit luxury models such as BMW's popular 7 and 8 series, it added.

The group also saw a 32% jump in global sales of fully electric and hybrid BMW and Mini vehicles, in line with a global shift towards more environmentally friendly cars.

Overall, the group delivered just over 2.3 million cars to customers globally in 2020, down from 2.5 million a year earlier.

BMW will unveil its outlook for 2021 when it presents full financial results on March 17.

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