A sea of new cars piles up at US port; BMW says earnings will deteriorate

National News

NEWARK, N.J. (CNN Newsource/WABC/AP) — A New Jersey port is overflowing as a sea of cars piled up at Port Newark.

On Friday, images showed the port flooded with vehicles as the new cars can not get to dealerships.

The New Jersey Port Authority says deliveries from the facility, which typically has imported vehicles, are down 25 percent from this time last year.

Nationwide, new car demand is expected to drop 27 percent this year.

Earlier this week, automaker BMW saw net profit fall slightly in the first quarter from a year earlier, when the company had a large one-time expense.

The company said it expected earnings to deteriorate during the first half of this year due to the coronavirus lockdowns and predicted the entire auto industry would be held back by the outbreak “for quite some time to come.”

The company said that it remained financially solid with 19 billion euros ($21 billion) in cash at the end of the first quarter.

GM reported that recent sales declines have been far smaller in southern, southwest and western U.S. states than in areas such as New York and Michigan, which have been hit harder by the virus.

But Edward Jones analyst Jeff Windau said the southern and western states have been hit hard by slowdowns in the oil and construction businesses that have brought job furloughs. Both businesses typically are big pickup truck customers.

Net profit fell at BMW 2.4% to 574 million euros ($620 million) in the first three months of the year, down from 588 million euros in the first quarter of 2019, the company said Wednesday. The year-earlier figure was lowered by a 1.4-billion euro charge stemming from a European Union anti-trust case.

Car sales fell 21% in the quarter as first China and then Europe and the United States saw dealerships closed during the outbreak.

Earnings were supported by a favorable product mix in which vehicles with higher profit margins predominated. It said sales this year would be substantially below last year’s and that a quick recovery “is unlikely” as the situation would only begin to stabilize in the third quarter.

The company said it expected profit margins of 0%-3% for the full year, cut from an earlier outlook of 2%-4%.

About 85% of U.S. General Motors dealers are selling vehicles online with about 3,500 participating, she said. About 90% of them are offering home delivery of new vehicles.

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