Honda and BMW see profits slump in second quarter as lockdown hit sales
Car giants Honda and BMW saw their profits hammered in the last quarter as the coronavirus pandemic hammered car sales amid widespread lockdowns.
Japan’s Honda fell to an 113.7bn yen (£820m) loss in the last quarter, as sales of its vehicles plunged 40 per cent around the world.
As a result of the dire quarterly performance, the company warned that it was on track for its worst year of profits since 2010/11.
According to its forecasts, profit will drop 68 per cent across the whole year, to 200bn yen, far below analyst expectations of 260bn yen.
Meanwhile, in Germany Munich-headquartered BMW swung to a €666m (£601.4m) loss, having recorded a €2.2bn profit in the same quarter the year before.
Despite the fall, the firm said that it expected to post a full year profit, though it warned this would be significantly below that achieved last year.
Shares in the firm fell 2.5 per cent in the morning’s trading, while in Toyko Honda’s shares climbed 2.2 per cent over the day.
BMW, which saw deliveries of luxury cars fall 25 per cent in the last quarter, said demand had begun to return in China, giving it reason to forecast a return to profit.
In a statement, chief executive Oliver Zipse said: “We are now looking ahead to the second six-month period with cautious optimism and continue to target an EBIT margin between 0 per cent and three per cent for the automotive segment in 2020”.
However, BMW warned that its forecasts did not take into account the chance of a second wave of coronavirus infections and further lockdown restrictions.
Carmakers around the world have been devastated by the pandemic, with auto giants such as Nissan, Mistsubishi and Mazda all recording hefty losses.