Automakers expect growth for 2021 despite car sales drop

Automakers such as BMW and Volkswagen announced on Wednesday they expect to see a significant increase in year-on-year revenue and profits and strong performance from all sectors despite the effects the coronavirus pandemic continues to have on the industry.

BMW said in a press conference it expects the automotive sector to record solid year-on-year increases in deliveries as the world attempts to free itself from the crisis, expecting pre-tax revenue to increase by between 6% to 8% with a particular emphasis on electric-vehicle sales by the end of the decade.

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The carmaker has said 90% of its market segments will contain fully-electric models by 2023 as the company begin its electrification drive, with its new i4 model scheduled to launch three months earlier than expected.

It will also be launching its flagship iX SUV is also due to go on sale this year.

Speaking at the conference, CEO Oliver Zipse said: “The BMW Group has ambitious plans for 2021. We have started the new year with strong momentum and are aiming to return to pre-crisis levels as swiftly as possible – and go even further.

"We have a clear road map for making the transformation of our industry a real competitive advantage for BMW in the coming years."

In another conference on Wednesday, fellow automaker VW also announced it expects its deliveries, sales and earnings to increase year-on-year following the implementation of its new strategy.

The group plans to deliver more than 450,000 new electric vehicles this year, more than double the year before.

However, the group has had complications in its decarbonisation efforts owing to the semiconductor shortage.

The automaker's CEO Herbert Diess said at its annual press conference that the company were unable to manufacturer at least 100,000 vehicles owing to chip shortages.

Both automakers are hoping to deliver on profits by the end of the year, despite the relatively bleak outlook for the first half of 2021.

The latest data from the European Automobile Manufacturers’ Association (ACEA) shows that new car registrations dropped by 20.3% to 850,170 in the EU, UK and EU's Economic Free Zone for February.

Read more: Ford to produce next-generation electric vans in Turkey from 2023

Most major European market reported declines in sales. Spain saw a drop of 38%, whereas France and Germany saw drops of 19% and 21% respectively.

All major players are currently relying on sales in China - which operates a massive potential market and quickly recovered from the pandemic - in order to minimise losses.

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