BMW Bounces But No Hint on its Reopening

The European stock market soared on Monday after weekend data showed the number of coronavirus-related deaths decreased in Italy and Spain. It also possibly may have peaked in Germany and Austria.

Data has indicated that the two companies worst hit by the pandemic were starting to bring things under control.

Investors were hoping that people’s daily lives would go back to normal. Companies were anticipating that people would start to buy more than the bare essentials they need to survive.

BMW is one that best represents a non-essential expenditure. Currently, about 80% of its dealerships in Europe and 70% in the US are closed. As a result, an update on Monday showed a drop of 20% in the first quarter of 2020.

BMW stock was among the top German stocks on Monday. It was up 7.2% while Volkswagen preferred stock was up 7.9%. Moreover, Daimler was up 7.4%, DAX as a whole was up 4.0% and Stoxx 600 was up 2.8%.

When will BMW Reopen?

BMW has not given any hint as to when its factories will return to normal production levels. It gave no statement about when its showrooms will reopen.

However, they are seeing the first signs of recovery with a strong order intake in China. This was a comment from the company’s sales head Pieter Nota.

BMW hopes that when the pandemic fades, demand for non-essential goods and services will prove to have only been held-back. But not entirely lost.

The company’s sales are not simply going to rebound to their pre-pre-pandemic trajectory though. People around the world are going to come out from the crisis but their businesses were badly hit. Reasonably, they will likely think twice before upgrading to a new series 7 or Mini Clubman.

There might be a need to incentivize with greater discounts and this can be a long period of lower profitability.

A bounce may be possible however BMX’s recovery path is still uncertain.

BMW Saw Demand Falling Further

BMW anticipates a further decline in global demand as COVID-19 takes its toll, a spokesman said on Monday. The German carmaker reported a 20.6% drop in the first quarter sales to 477,111 vehicles.

BMW said by February the impact of the pandemic had already led to a significant decrease in sales in China. Furthermore, by March, the effects of the pandemic were clearly visible in sales figures in Europe and the U.S.

Shares in BMW went up 5.7% as European stock trading rebounded. There were hopes the region might be winning over the virus crisis.

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