German luxury carmaker BMW forecasts that the auto industry will see up to 11 billion euro loss due to the Brexit impact. As BMW’s Chief Financial Officer Nicolas Peter said, UK’s exit from the European Union could cost the auto manufacturers and the auto component suppliers up to 11 billion euros, unless the cross-border trade remains tariff-free and unbureaucratic.
The luxury carmaker also said that it has spent a low double-digit million euro amount in 2020 to prepare for the Brexit. Peter also said that the UK should continue to keep pace with the European Union’s emission requirements. This will help the automakers to sell the same cars across entire European markets.
Talking about BMW AG’s emission reduction targets, the automaker’s CFO said that strong demand for the electric and hybrid cars has helped it to stay ahead of projected targets for 2020.
Meanwhile, BMW AG claims that sales in China has helped the auto company to weather the Coronavirus pandemic and now it is on track to meet the full-year targets. Car sales in China increased by a fifth in September 2020 compared to the same month a year ago.
The German automaker is on track to meet both its full-year forecasts and the European Union emission targets in 2020.
BMW has projected an automotive Ebit margin of between 0%-3% for 2020 and for sales to be significantly lower than 2019 after the Covid-19 pandemic forced factories and dealerships to shut down. BMW-brand vehicles’ deliveries are down 11% in 2020 through September.
BMW is also working to ramp up sales of its electric cars to meet the emissions regulations in Europe that will be stringent in 2021.
As BMW says, the third quarter was much better than the second quarter of 2020. However, with different speeds of recovery in different markets and regions. While the first two quarters was severely hit by the lockdowns and halt in economic activities across the world due to the Coronavirus pandemic, the third quarter saw a gradual reopening of the economic activities.