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Tag: Auto

  • General Motors Instructs Mexican Suppliers To Prepare To Resume Operations

    General Motors Instructs Mexican Suppliers To Prepare To Resume Operations

    The president of General Motors Co’s Mexican unit advised suppliers to prepare to resume operations after the Mexican government said the automotive industry could exit the coronavirus lockdown before June 1 with adequate safety measures.

    “We are now beginning a new phase given the Mexican government’s official announcement earlier this week to consider the transportation manufacturing industry as essential for the country’s economy,” Francisco Garza, president of General Motors de Mexico, wrote in an email to suppliers dated on Friday that was viewed by Reuters.

    Noting the Mexican government is due to publish final safety rules on Monday, Garza added: “Once those final guidelines are known, we will be in a position to move swiftly to comply.”

    GM is tentatively planning to restart operations at its auto assembly plant in the Mexican city of Silao on Wednesday, according to a message to workers seen by Reuters on Sunday.

    Hundreds of workers at General Motors and other auto companies have gone back to work to make face shields, surgical masks and ventilators in a wartime-like effort to stem shortages of protective gear and equipment.

    Workers at the plant in the central state of Guanajuato that has been idled for weeks due to the coronavirus outbreak had previously been told to plan to return to work on Monday.

    GM did not immediately respond to a request for comment.

    The Mexican government’s announcement, made on Friday, means that automakers from as early as this week can begin reconnecting supply chains between Mexico and the rest of North America, which depends heavily on parts made south of the U.S. border.

    Senior U.S. politicians and auto companies had pressed the Mexican government to reopen factories.

    Some politicians are wary, however, of opening too fast. Mexico registered its first case of the coronavirus weeks after the United States and Canada and the toll of daily infections and deaths in the country reached new peaks over the past few days.

    Mexico has registered 49,219 cases of the coronavirus and 5,177 deaths.

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  • Subaru Says Full-Year Profit Rose 16%

    Subaru Says Full-Year Profit Rose 16%

    Subaru Corp on Monday posted a 15.7% rise in annual operating profit in the year that ended in March as it recovered from production delays and product recalls last year, but warned of uncertainties from the coronavirus outbreak this year.

    Profit was 210.3 billion yen ($1.96 billion) for the year just ended, up from 181.7 billion yen a year earlier under international financial reporting standards. It exceeded a consensus estimate of 204.7 billion yen profit drawn from 17 analysts polled by Refinitiv.

    Subaru declined to give an earnings forecast for the current business year, citing uncertainties about the longer-term impact of the coronavirus outbreak on its operations and sales.

    It saw a 3% rise in global vehicle sales in the year to March to 1.03 million units, bouncing back from last year, when a defective steering component and measures to improve inspection tests had stopped output for two weeks at its sole assembly plant in Japan.

    The issue stems from faulty airbags made by Japanese automotive parts company Takata.

    The automaker managed to grow sales for the year despite a 40% drop in global sales in March, when vehicle plants and car showrooms around the world began to close due to coronavirus lockdown measures ordered in many countries.

    The automaker resumed limited vehicle production at its plants in Japan and the United States on May 11 after weeks of closure.

    Though global automakers have begun to restart vehicle plants, anemic demand, supply chain disruptions and social distancing measures at factories are expected to limit output in the coming months.

    Some analysts believe industry-wide global auto sales could slump by a third this year and that any recovery will be slow and patchy as job losses and reduced incomes weigh on consumer spending.

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  • Nissan India Introduces New Finance Schemes And Pick-Up & Drop Service

    Nissan India Introduces New Finance Schemes And Pick-Up & Drop Service

    Nissan India has introduced a new car finance schemes and pick-up & drop service to ensure customers don’t need to come to visit dealerships and workshops and avoid physical contact. The Japanese carmaker has partnered with various financial institutions and is now offering a range of schemes offering paperless payment of car loans, special offers for women car loan applicants and professional based products for salaried, self-employed, Government & Public Sector Units (PSU) employees, police and the agriculture sector.

    Rakesh Srivastava, Managing Director- Nissan Motor India, said, “With innovative financial schemes and initiatives including ease of financing and convenience in getting their car serviced, Nissan India will enrich the customer experience at each step, which is especially important in such challenging times.”

    The first of its kind finance and insurance scheme also include job Loss Protection’ on EMI’s covering loss of job and medical emergencies including Coronavirus, optional payment from January 2021 on select products and zero-mile car product has been introduced looking at the opportunities in the used car business. Nissan India also announced the launch of its new pick-up & drop service. It is offering an end-to-end hygienic pick-up & drop solution including a standard sanitization process for all frequent touchpoints in the vehicle such as door handles and gear lever. Drivers delivering the vehicles will also follow full hygiene regulations between the customer location and Nissan workshop. The complimentary pick-up & drop service is available in all major cities while customers in other locations can also avail of this service at a minimal charge.

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  • Aston Martin Posts Deep Loss As Coronavirus Outbreak Hits Sales

    Aston Martin Posts Deep Loss As Coronavirus Outbreak Hits Sales

    Aston Martin posted a first-quarter pretax loss of 119 million pounds ($146 million) after sales dropped by nearly a third due to the impact of the coronavirus outbreak and the destocking of dealers, the carmaker said on Wednesday.

    “COVID-19 and the resulting global economic shutdown has had a material impact on our performance this quarter,” said Chief Executive Andy Palmer.

    The carmaker, which has seen core retail sales slump by an annual 31%, has furloughed staff, introduced additional safety measures and cut the pay of its senior management as part of measures to handle the crisis caused by the pandemic.

    Canadian billionaire Lawrence Stroll, who leads a consortium which took a stake in the company earlier this year, hopes to pursue a turnaround partly by sharing Formula One technology with the firm’s range of road cars.

    But the firm said on Wednesday the pandemic meant it could no longer provide full-year guidance.

    “Given the ongoing uncertainties, as is prudent, the company continues to review all future funding and refinancing options to increase liquidity,” it said.

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  • Tesla, California County Reach Deal To Reopen U.S. Plant Next Week

    Tesla, California County Reach Deal To Reopen U.S. Plant Next Week

    Tesla Inc and officials in California have resolved their acrimonious clash over safety procedures at the automaker’s sole U.S. assembly plant with a deal that allows production to resume as early as Monday, county officials said.

    The county said the automaker could take additional steps ahead of next week after Chief Executive Elon Musk had vowed to defy authorities, saying Monday he was resuming production despite the prohibition. On Tuesday, he also won the backing of President Donald Trump.

    In a tweet, Alameda County said that following talks with Tesla it agreed that the electric carmaker can take steps “in preparation for possible reopening as soon as next week.”

    Tesla did not immediately comment Wednesday but around the same time the county issued its statement, Musk tweeted: “Life should be lived.”

    Tesla’s sole U.S. electric vehicle assembly plant is in Fremont, California, which is in Alameda County.

    The county said it would work with the police in Fremont “to verify Tesla is adhering to physical distancing and that agreed-upon health and safety measures are in place for the safety of their workers as they prepare for full production.”

    Tesla and officials in California have resolved their acrimonious clash over safety procedures at the automaker’s sole U.S. assembly plant with a deal that allows production to resume as early as Monday, county officials said. This report produced by Yahaira Jacquez.

    On Monday, Musk said production was resuming in Fremont, defying an order to stay closed and saying if anyone had to be arrested, it should be him.

    On Tuesday, Musk won Trump’s backing. “California should let Tesla & @elonmusk open the plant, NOW. It can be done Fast & Safely!” Trump wrote on Twitter. The White House did not immediately comment on the announcement.

    Tesla fell 3.3% in afternoon trading to $782.43.

    California Attorney General Xavier Becerra told CNBC that “conversation is going on between Tesla and the county. But at the state level, we’re ready to enforce if we find that anyone is violating the state orders issued by the governor.”

    On Tuesday, employee parking lots at Tesla’s factory in Fremont, California, were packed with cars. Trucks could be seen driving in and out of the factory grounds.

    At the Fremont factory’s outbound logistics parking lot, where only a dozen Tesla cars were parked last week, hundreds of Tesla vehicles were seen on Tuesday.

    The company had sued Alameda County challenging its decision that the plant should stay closed.

    A county health official on Friday said the county had asked all manufacturers, including Tesla, to delay operations by at least another week to monitor infection and hospitalization rates.

    Tesla on Saturday released a plan to keep workers returning to the factory safe.

    The measures, which include temperature screenings, the installation of barriers to separate work areas and protective equipment for workers, are similar to those set up by Detroit-based automakers General Motors, Ford and Fiat Chrysler. Those automakers are set to resume at most U.S. auto plants starting Monday.

    Trump is eager for the U.S. economy to reopen and for Americans to return to work.

    Musk over the weekend threatened to leave California for Texas or Nevada over his factory’s closure. His move has highlighted the competition for jobs and ignited a rush to woo the billionaire executive by states that have reopened their economies more quickly in response to encouragement from Trump.

    Last month, Musk was on a call with Trump and other chief executives to discuss the reopening of the U.S. economy in which Musk said he wanted to be able to resume production by May 1 or earlier, a person briefed on the call confirmed. Details of the call were reported earlier by the Washington Post.

    Musk’s fight with local authorities has gotten the attention of those who scout sites for new factories and corporate offices, as well as economic development officials hungry for more jobs.

    Since the disagreement between Tesla and Alameda County gained national attention, officials from such states as Texas, Nevada, Georgia, Utah and Oklahoma have pitched Musk about considering their state. Analysts estimate it would take Tesla 12 to 18 months to move production.

    The Fremont factory employs more than 10,000 people, according to the automaker.

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  • Fiat Chrysler, Peugeot Decide To Withhold 2019 Dividend Payout

    Fiat Chrysler, Peugeot Decide To Withhold 2019 Dividend Payout

    The boards of automakers Fiat Chrysler Automobiles N.V. and Peugeot S.A said on Wednesday it would not pay an ordinary dividend for 2019 this year due to a collapse in consumer demand resulting from the COVID-19 pandemic.

    The health crisis has thrown the global auto industry into the worst tailspin since the 2008-09 financial crisis. Consumer demand for vehicles has plummeted as governments across Europe and the United States have enforced lockdowns.

    Fiat has already finalized a plan in overnight talks with Renault, and the deal would be discussed at a meeting of Renault’s board on Monday.

    The two companies also confirmed that preparations for their merger are advancing with respect to antitrust and other regulatory filings.

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  • Toyota India Partially Resumes Retail And After-Sales Operations

    Toyota India Partially Resumes Retail And After-Sales Operations

    Toyota Kirloskar Motor today announced that it has partially resumed retail and service operations in India. It was towards the end of March 2020 that the company announced suspending production and retail activities, in accordance with the nationwide lockdown to curb the spread of the coronavirus. Now, adhering to the advisory issued by the Central and State Governments, the company has re-opened 171 dealership outlets and 146 service outlets, across India. Toyota says that as per the government protocols, all dealerships will function with the prescribed percentage of the workforce, and they will practice stringent social distancing, ensuring the health and safety of all their staff.

    Commenting on the development, Masakazu Yoshimura, Managing Director, Toyota Kirloskar Motor said, “While the lockdown was a necessary step to counter the virus spread and curb the consequences triggered by the pandemic, it is paramount to reignite confidence among customers, and stakeholders and boost their morale, during these difficult times. As we gradually recommence operations, we are ensuring the safety and wellbeing of all our stakeholders while simultaneously safeguarding business continuity.” Toyota will continue to closely review the developments in each region and will take the necessary steps based on the situation.

    Last month, the company had also released a dealer restart manual as a guide for industries to follow post the lockdown withdrawal, Toyota Kirloskar Motor has come out with a similar measure for its dealerships. As per the guidelines, dealerships will maintain hygiene at all customer touchpoints, do regular sanitization and ensure minimized usage of air conditioners. The staff must always wear face masks and all visitors and employees must go through thermal checking before entering the facility. For sales operations product demonstration will see a change new disinfection process will be implemented before every demo, to assure customer safety. Masks and gloves will be provided during test drives and the company representative will be directed to sit in the rear seat while the customer drives, adhering to the rule of social distancing.

    The company understands that close to 75 percent of its suppliers have received a nod from the Government to recommence operations, while the remainders are expected to receive the necessary permission soon. Also, as of May 5, 2020, Toyota has begun preparatory operations at the plant to provide the workforce with an adequately safe environment to work in, duly prioritizing domains like spare parts supply. The operations at the TKM plant too will resume in a phased manner, keeping in mind the need for social distancing and thorough sanitization.

  • China’s April Passenger Car Retail Sales Down 5.6%

    China’s April Passenger Car Retail Sales Down 5.6%

    China’s passenger car retail sales in April fell 5.6% from a year earlier to 1.43 million, the China Passenger Car Association said on Monday, as the country gradually recovers from the coronavirus.

    China on Wednesday reported 52 new coronavirus deaths, the lowest figure in more than three weeks. The number of fresh coronavirus cases has declined in China, with multiple provinces reporting zero new infections in recent days.

    The association said during an online briefing that the overall passenger car sales trend is showing a quick recovery from the virus-induced low.

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  • Mazda Motor Seeks $2.8 Billion In Loans To Ride Out Pandemic

    Mazda Motor Seeks $2.8 Billion In Loans To Ride Out Pandemic

    Mazda Motor Corp has sought loans totaling about 300 billion yen ($2.8 billion) from Japan’s three megabanks and other lenders to ride out the coronavirus epidemic, a source with direct knowledge of the matter said on Saturday. The megabanks – Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and Mizuho Financial Group – along with the Development Bank of Japan, Sumitomo Mitsui Trust Holdings and others are set to agree, with some already having extended the loans, the person said, declining to be identified because the information is not public.

    All three megabanks declined to comment on the loan request, which was reported by the Nikkei business daily earlier. Mazda did not immediately respond to a request for comment.

    Mazda, like most other automakers, has reduced or halted production at factories around the world for the past few months as governments try to limit the spread of the new coronavirus.

    Mazda’s car sales and balance sheet had been weak even before the virus slammed the brakes on demand, with its interest-bearing debt of 650 billion yen far exceeding its cash and cash equivalents, according to the Nikkei. Mazda is scheduled to announce its financial results for the year ended in March on Thursday.

  • Ferrari Restarts Production At Maranello & Modena Plants In Full Capacity

    Ferrari Restarts Production At Maranello & Modena Plants In Full Capacity

    Ferrari, on Friday, officially announced the resumption of operations at its Maranello and Modena plants at full capacity, which in-line with its ‘Back on Track’ program. The first car to roll out from the Special Series lines was Ferrari Monza SP2 with a black and grey livery. The operations at the facility were suspended just a few hours before its completion due to the Coronavirus outbreak. Over the next few days, the company successfully rolled out the 812 GTS spider in Grigio GTS and an F8 Tributo in Rosso Corsa from the 12 and 8 cylinder lines. The new cars are ready to be delivered to the customers in Australia, Germany & USA.

    The sports car manufacturer introduced a new ‘Back on Track’ program, which majorly focuses on several practices and preventive guidelines aimed at the safety and wellbeing of the employees. The facilities in Maranello and Modena are subjected to follow these new rules and guidelines very strictly. These measures are taken specifically for common areas. The company has also reorganized the work area in order to ensure social distancing is maintained at the workplace.

    Additionally, Ferrari has also carried out a new training session for its staff wherein demonstrating the new guidelines and steps needs to be taken as precautionary measures while at work. Last month, the company came forward in support of health workers treating coronavirus patients wherein it started producing respirator valves and fittings for protective masks at its Maranello plant as one of its initiatives undertaken by Ferrari.

    The company can commence the manufacturing of the F8 Tribute and Spider, Roma, Portofino, GTC4Lusso, and GTC4Lusso T, SF90 Stradale, and the flagship hybrid hypercar along with the limited edition sports cars at the Maranello and Modena plants.

  • Volkswagen Passenger Cars India Appoints Abbey Thomas As Head of Marketin

    Volkswagen Passenger Cars India Appoints Abbey Thomas As Head of Marketin

    Volkswagen Passenger Cars India has announced the appointment of Abbey Thomas as Head of Marketing effective immediately. He will spearhead the company’s marketing strategy in India. Abbey Thomas replaces Bishwajeet Samal, who embarks on a new assignment at Volkswagen’s headquarters in Germany. Abbey has over 25 years of automotive industry experience and has previously worked with Audi India as Head of Planning (Product & Sales).

    He joined the Group in 2011 and has ranked up by leading various Marketing and Product functions. Steffen Knapp, Director, Volkswagen Passenger Cars India said, “At Volkswagen, our philosophy is to nurture our in-house talent and create a growth journey for our employees within the Group. We are extremely delighted to have Abbey on-board with us, whose extensive experience will strengthen our brand salience across our stakeholders in the automotive ecosystem.”

    Abbey Thomas will be reported to Steffen Knapp in his new role as Head of Marketing. Volkswagen India has already charted its course in the country by focusing on SUVs for the market and now with the ‘SUVW’ strategy in place, there’s a lot to look forward to in terms of cars. While we already know that the company’s next launch is the Taigun next year, the Tiguan AllSpace and the T-Roc are already in the market and we wait to see how the cars will do in terms of sales.

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  • Fiat Chrysler Plunges To Loss

    Fiat Chrysler Plunges To Loss

    Fiat Chrysler Automobiles (FCA) plunged to a first-quarter loss of $1.8 billion and warned of a “significant” loss this quarter, even as it prepares to reopen its most profitable North American truck plants on May 18 as coronavirus lockdowns ease.

    The Italian-American company, which has struck a binding merger deal with France’s PSA Group to create the world’s fourth-largest carmaker, said on Tuesday that work on the tie-up was “progressing incredibly well.”

    On a conference call, Chief Executive Michael Manley said “the terms of the deal have not changed” and FCA remained “committed to completing the transaction by the end of this year or early 2021.”

    Car sales across the world have slumped as measures to contain the coronavirus pandemic forced production lines to shut and showrooms to close, leaving manufacturers scrambling to try to conserve cash.

    Manley said a planned 1.1 billion euro ($1.2 billion) dividend was under review, as part of FCA’s efforts. The company also scrapped its full-year earnings forecast.

    FCA has begun reopening plants in China and Europe, and said most of its North American ones were expected to reopen on May 18.

    In the United States, UAW president Rory Gamble responded to the planned restart by saying automakers must “implement and follow the guidelines” for worker safety that the union had worked out with them. The union had objected to automakers’ original plans to reopen in early May.

    Peugeot-maker PSA is braced for a slump in demand but says it has the funds to cope without government help.

    Much of FCA’s revenue and profit come from North America, where quarterly sales of its Ram truck brand were up 7% from the previous year and its share of the full-size pickup market rose to 24%.

    Capital expenditure (capex) was up in the quarter, driven by spending on the new Jeep Wagoneer and Grand Wagoneer, and redesigned Jeep Grand Cherokee models. But executives said full-year capex estimates would be trimmed by 1 billion euros as key program launches had been delayed by an average three months.

    FCA said it made a net loss from continuing operations of 1.69 billion euros ($1.83 billion) in the quarter. That compared with a 508 million euro net profit a year earlier.

    “The pandemic has had, and continues to have, a significant impact on our operations,” the company said in a statement.

    However, FCA still made an operating profit, albeit 95% lower than a year earlier. Adjusted earnings before interest and tax (EBIT) amounted to 52 million euros.

    FCA’s Milan-listed shares extended their gains after the results were released and were up 2.2% at 1355 GMT.

    The automaker said that due to the continued uncertainty related to the pandemic, it had withdrawn its full-year guidance and would update it when it had better visibility of the overall impact of the crisis.

    In February, the group guided for an increase in adjusted EBIT to more than 7 billion euros this year and industrial free cash flow of over 2 billion euros.

    In the first quarter, industrial free cash flow was around minus 5 billion euros. But FCA said it had available liquidity of 18.6 billion euros as of March 31, including a 6.25 billion revolving credit facility which was fully drawn down in April.

    Liquidity was further strengthened last month with a new 3.5 billion euro incremental bridge credit facility, which remains fully undrawn.

    “We continue to assess all funding options,” FCA said.

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  • BMW Cuts Margin Outlook For Cars Division

    BMW Cuts Margin Outlook For Cars Division

    BMW on Tuesday lowered the outlook for the profitability of its automotive and motorcycles divisions, citing worse-than-expected demand which has been hit by measures to contain the coronavirus.

    BMW said it expects the earnings before interest and taxes (EBIT) margin for the automotive segment to fall within a range between 0% and 3% this year, adjusting its outlook from a previously expected margin range of between 2% and 4%.

    “The decisive factor for the adjustment is that the measures to contain the coronavirus pandemic are lasting longer in several markets and are thus leading to a broader negative impact than was foreseeable in mid-March,” BMW said.

    Delivery volumes in these markets will not rebound within a few weeks as BMW had assumed, with the highest negative impact now expected in the second quarter of 2020, the carmaker said, cautioning that matters could still get worse.

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    “The updated guidance does not, in particular, include, a longer and deeper recession in major markets, a more severe economic slowdown in China as a result of recessions in other parts of the world,” BMW added.

    Further margin pressure could come from market distortions caused by an even stronger competitive environment or from the second wave of infections and associated containment measures.

    The Munich-based group further said it now expects deliveries of motorcycles to be down significantly from 2019 levels.

    The EBIT margin in the motorcycles segment will now be within a range of between 3% and 5%, rather than 6% and 8%, BMW said.

    Last month BMW warned it was expecting a further decline in global demand even after a 20.6% drop in first-quarter sales to 477,111 vehicles.

    BMW said in March that its pre-tax profit and vehicle deliveries would drop significantly this year as the coronavirus spreads, and that this – combined with higher research and development spending – would lower the profit margin in its automotive segment.

    BMW is due to publish first-quarter earnings on May 6.

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  • Skoda Auto Braces For Second-Quarter Hit After Earnings Drop Globally

    Skoda Auto Braces For Second-Quarter Hit After Earnings Drop Globally

    Czech carmaker Skoda Auto, part of the Volkswagen Group, reported a 25% drop in first-quarter operating profit on Monday, but said the biggest hit from the coronavirus outbreak would come in the second quarter.

    Skoda, the Czech Republic’s largest exporter which counts China as its biggest individual market, started feeling the impact of the coronavirus crisis during the first three months of the year as its global sales fell by a quarter and it shut its domestic factories for 39 days beginning in March.

    However, the company said the biggest impact from the pandemic was still to come and it had started measures to reduce costs and spending in the short term.

    “We expect the greatest impact of the current crisis to be in the second quarter, followed by a gradual recovery in the third quarter and a possible return to the previous year’s level in the fourth quarter,” board member Klaus-Dieter Schurmann said.

    Hyundai Creta Bookings, Skoda Karoq Details, Datsun redi-Go

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    First-quarter revenue fell 1.4% to 4.85 billion euros, while worldwide deliveries tumbled 24% to 232,900 vehicles. Not including China, deliveries fell 16%.

    Skoda has boosted annual deliveries above 1 million in recent years but like other carmakers has been hit hard the virus outbreak, which started in China around the turn of the year before hitting Europe in force in March.

    Skoda relaunched production at a reduced pace on April 27 and the entire car sector in the central European country faces a shaky restart, with officials expecting the sector to run below capacity this year.

    Skoda Chief Executive Bernhard Maier said the shutdown meant a loss in the production of 100,000 cars. He said it was still difficult to forecast global car sales in the coming months but that the company was well-positioned.

    “We are fighting for every car, because our order backlog is still high,” he said, adding Skoda was sticking to its medium and long-term development plans.

  • Ferrari Slowed By Coronavirus, But Not Driven Off Course

    Ferrari Slowed By Coronavirus, But Not Driven Off Course

    Luxury sports car maker Ferrari still expects to make more than $1 billion in core profit this year, providing a relative beacon of stability in an auto industry ravaged by the coronavirus crisis.

    The company, known for its red Formula One racing cars and its prancing horse logo, cut its 2020 core earnings forecast on Monday, blaming a hit to motorsport revenues among other pressures, and warning of an extremely tough second quarter.

    But the Italian firm said it still expected to generate free cash flow this year, and its guidance contrasted with others in the industry – including U.S. electric carmaker Tesla, Germany’s Daimler and Porsche-owner Volkswagen – which have all suspended forecasting.

    “This extraordinary level of stability in an economic crisis takes top place at the podium,” Morgan Stanley analysts said.

    Ferrari shares closed up 1.5% at 154.50 euros, having fallen over 5% immediately after news of the downgrade. By contrast, Europe’s auto index closed down 4.4%.

    Car sales across the world have slumped as measures to contain the virus pandemic forced production lines to shut and showrooms to close. Data on Monday showed the biggest ever drop in business morale in Germany’s auto sector.

    Ferrari, which on Monday restarted operations at its plants in Maranello and Modena, predicted a “harsh” reduction of revenues linked to Formula One, where races have been suspended, as well as reduced turnover from brand projects and lower engine shipments to Maserati.

    “Second quarter will be very weak,” Chief Executive Louis Camilleri told analysts, as the company said it now expected adjusted earnings before interest, tax, depreciation and amortization (EBITDA) this year to edge down from 2019 levels to 1.05-1.20 billion euros ($1.15-$1.31 billion).

    In February, Ferrari had projected an increase in 2020 EBITDA to 1.38-1.43 billion euros.

    “While the Formula One hit to revenues and earnings is not an easy matter to digest, the good news is that the significant losses incurred should be short-lived and contained to 2020,” Camilleri said.

    The CEO said projections relied on Ferrari’s ability to retain a “very strong” order book, adding that as of now it had not received any “abnormal or untoward” cancellations.

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    Ferrari, whose origins date back to 1929, said it now expected industrial free cash flow of 100-200 million euros this year, compared with 400 million euros or more previously.

    The company, which like its former parent Fiat Chrysler is controlled by the Exor holding company of the Agnelli family, cautioned its new guidance did not include a potential second wave of COVID-19 infections.

    In the first quarter of this year, adjusted EBITDA rose 1.9% to 317 million euros, broadly in line with a 322 million euro forecast in an analyst poll compiled by Reuters.

    Ferrari’s two plants, both located in Italy’s northern Emilia Romagna region, had been closed since mid March.

    Volumes rose despite delivery suspensions due to the virus outbreak, driven by 488 Pista and 488 Pista Spider models, along with the ramp up of the F8 Tributo, the company said.

    The margin on adjusted EBITDA came in at 34% in the first quarter, up from 33.1% a year earlier.

    Ferrari said its total available liquidity at the end of March was 1.23 billion euros. Last month, it secured additional committed credit lines worth 350 million euros, with maturities up to 24 months, taking total committed, available and undrawn credit lines to 700 million euros, it said.

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