High price, stable supply chain protects BMW from industry predicament

Berlin-BMW exceeded analysts’ expectations on Wednesday, with third-quarter net income up 42.4% to € 2.58 billion ($ 2.99 billion).

Treasury manager Nicolas Peter said in a statement that he was confident that he would exceed the 10% margin on pre-tax profit this year, but tax payments and investment costs rose in the fourth quarter. May be slightly weakened by.

According to Peter, EV sales are expected to continue until 2022 in the future.

While rising raw material prices have affected earnings this year, strong relationships with suppliers have eased the blow, said CEO Oliver Zipse.

“We have always been closely monitoring our supply chain, which is now paying off to the raw materials,” says Zipse.

No tip, no problem?

Automakers from Volkswagen to Stellantis to Renault are experiencing a drop in third-quarter sales due to a shortage of chips, and consultancy BCG reported in September this year due to a shortage. Production of a total of 10 to 11 million vehicles is projected to decline.

However, luxury producers like BMW and rival Daimler, which were able to raise prices to offset losses, worked much better than others, and both companies reported an EBIT margin of 7.8% in the third quarter. It exceeded 4.9% of Volkswagen.

BMW’s third-quarter shipments fell 12.2%, but revenues remained up 4.5%. In particular, EVs have increased significantly, and sales in the nine months to September have almost doubled from just under 232,000 units last year.

“In addition to stable price trends for used cars, a better product mix and proper pricing for new cars has strengthened the financial performance of the business,” the company’s statement said.

Still, Peter said the chip shortage was “never a blessing” for the tens of thousands of cars the company could sell but not produce.

Earlier this year, the chief financial officer said he plans to ship up to 90,000 cars in 2021 due to a shortage of chips.

BMW maintained its full-year EBIT margin forecast for the automotive sector from 9.5% to 10.5%, adding that this goal would be achieved with a slight reduction in the number of employees.

“We are on track for the year-round forecast and we are looking forward to it,” Peter said. “We anticipate that semiconductor supply will be a problem after 2021.”

($ 1 = 0.8636 euros)

By Victoria Waldersee