Eric Krügl / BMW
“Cautiously confident” – BMW boss Oliver Zipse hits the right note in times of coronavirus
That’s not how it was meant in Munich, of course. BMWBoss Oliver Zipse wanted to set the first signs at the annual press conference 2020. Seven months ago he took over the position of CEO, now he wanted to give an outlook on his goals. Also report that BMW has increased sales and earnings over the course of the quarters of 2019. And explain how he wants to meet the CO2 requirements of the European Union and avoid fines.
He also talked about his plans this morning. But the audience was primarily interested in another topic: corona. And then Zipse and CFO Nicolas Peter spoke very clearly. Worldwide sales in 2020 will be “significantly lower than in the previous year”, profits will fall massively, and the return on sales in the automotive business will be between two and four percent. And this negative scenario immediately linked the BMW leadership with the restriction that it would require the situation to normalize after a few weeks. Possible further corona effects cannot currently be estimated.
Say: it should get worse. The car manufacturer consequently closes its plants in Europe for four weeks; and not for two like for example the competitors Volkswagen and Daimler.
What does it all mean? Above all, a little more clarity, maybe a little more honesty. Nobody knows how hard the Corona virus hits German industry. At the annual press conference in Wolfsburg yesterday, Volkswagen CEO Herbert Diess gave the impression that the carmaker would be able to steer through the crisis somewhat loosely, after all, in China it was almost back to the old state.
BMW didn’t paint black either. CFO Peter emphasized that a good 17 billion euros in liquidity should form a decent buffer. Board member for sales Pieter Nota pointed out that 95 percent of the dealers in China had reopened their businesses. And works council chief Manfred Schoch jumped Zipse aside: working time accounts, short-time work and home office offer protection to “steer our workforce sensibly and safely through this corona crisis”.
Oliver Zipse himself stated: “Even in the current situation, we are nevertheless cautiously confident”. But: “Careful” is the central word. Gloom doesn’t help. Not exaggerated optimism either. The BMW boss hit the nail on the head. Now he has to keep the company on track.