Car companies have to drop financial forecasts as crisis bites

As car companies report first quarter financial results, many are making it clear that they cannot issue their usual guidance on the full-year outlook because of the uncertainties generated by the COVID-19 crisis;

David Leggett, Automotive Analyst at GlobalData, a leading data and analytics company, offers his views:

“We are in unprecedented times in the global automotive industry. Demand and manufacturing have collapsed in a short period of time and the outlook is very, very uncertain.

“Companies are now reporting first quarter results that show a considerable dent to revenue and bottom lines already, although many companies did not feel the main force of impact of the COVID-19 crisis until March.

“In terms of the outlook, it is not surprising that companies are unable to issue guidance for the whole year beyond stating that they expect revenues and profits will be down.

“There are huge uncertainties surrounding the timing of any relaxation or ending of still necessary public health restrictions on populations, which means the vehicle demand outlook and manufacturing outlooks for companies are facing a very wide spectrum of possible outcomes.

“We expect automotive company revenue and earnings to be well down across the board this year.”

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