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BMW AVOIDS THE WORST

Thanks to strong early-season demand, BMW Motorrad earned a reprieve from really serious repercussions due to the Covid-19 pandemic in its first-quarter 2020 results. BDN financial editor Roger Willis reports.

BMW’s motorcycle division revenue for the period was a relatively modest 4.9% lower at £486.4m. Associated operating profit sank by 19.1% to £62.9m and operating margin declined from 15.2% to 12.9%.

However, fine detail appertaining to the sector in BMW Group’s Q1 statement was scant. Segmental chapters covered only Automotive and Financial Services performance, with Motorrad absent. 

The only further hard information was that worldwide quarterly retail sales for the brand fell by 9.9% to 34,774 motorcycles and maxiscooters. These figures suggest that delivery volume in some markets held up better than others —dependent on just when coronavirus lockdowns affected customers and dealer distribution channels.

For instance, from MCIA data, we know that traditionally thin January and February registrations for BMW in the UK were nevertheless healthy — respectively rising by 7.9% and 22.4%. But then larger March numbers suffered a 34.1% plunge, culminating in an overall Q1 retreat of 24.2% to 2094 bikes.

In its outlook appraisal for the rest of this year, BMW Group reckoned much more deleterious circumstances would follow: “Within a volatile environment, currently overshadowed by the global spread of coronavirus, business is expected to develop negatively during 2020. Despite the expectation that numerous new automobile and motorcycle models, as well as individual mobility-related services, would normally generate additional momentum, the various burdens on the global economy are likely to have a significant offsetting impact… Motorcycle segment deliveries to customers are set to decrease significantly.” 

This forecast also included a prediction that BMW Motorrad’s operating margin, which finished at an annualised 8.2% last year, may be as low as 3% in 2020.

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