Jump to profit: BMW is optimistic

Jump to profit: BMW is optimistic

The BMW logo is on the front of the engine. – © Christophe Gateau/dpa/Symbolbild

Automaker BMW increased its third-quarter profit by 23 percent to 3.2 billion euros and “looks ahead to the coming months with confidence,” CEO Oliver Zipse said Thursday. The order books are still well filled. Despite high costs and a drop in orders, particularly in Germany and the UK, BMW can “enter the new year with confidence,” CFO Nicolas Peter said.

Zipse accompanies Chancellor Olaf Scholz on his trip to China, which is the most important market for BMW and other German automakers. BMW is expanding its plants there, it took majority in the Chinese joint venture BMW Brilliance Automotive (BBA) in February and therefore it is heading for record results this year: After the first nine months, BMW has already posted a profit of 20.3 billion euros. tax, after 13.2 billion in the same period last year.

With 588,000 vehicles delivered in the third quarter, BMW fell just short of last year’s strong level. The shortage of semiconductors was still slowing down production, and in China every tenth BMW dealer was closed due to Corona – “but that will improve in the coming weeks,” said Peter. Thanks to high prices for new and used cars, a large number of expensive models and the weak euro, sales rose by 35 percent to 37.2 billion euros. The profit margin in the automotive division improved to 8.9 percent and thus reached the higher end of the target range. Without the effects of the BBA consolidation, it would have been 10.1 percent.

“We expect strong sales growth in the fourth quarter,” said Peter. Inflation, rising interest rates and the looming recession in Germany and parts of Europe slowed orders coming in here. “But the advanced arrangement will carry us through to 2023.” The United States and China are likely to develop well. The demand for electric vehicles is high and growing. BMW’s growth momentum will continue, said the chief financial officer.

Bad for car buyers, good for BMW: Peter expects prices to remain high with no discounts in all major markets. Used cars should also get better residual rates in 2023, because then less rental income would enter the market due to production limitations in the Corona years.

When it comes to financial services, the company is feeling a headwind: in the third quarter, only 42 percent of new BMW cars were financed with a loan or lease, down from 51 percent a year ago. At the same time, loan default provisions were increased, even if the actual ratio of loan losses was very low.

By the end of September, BMW had delivered “more than 128,000 Stromer with increasing demand”. Orders for the iX, iX3, i4 and Mini Cooper SE electric models are up, with the range-topping iX1 and i7 coming soon. With this and with a balanced position around the world in Europe, America and Asia, BMW is optimistic: “In general, we also expect good momentum for our company in 2023,” said Peter. With regard to gas and electricity supply, he does not expect any production disruptions at European plants this winter.

BMW has confirmed its forecast for this year and expects sales to be slightly below last year’s level of 2.5 million vehicles. Due to the full consolidation of BBA, the profit before tax will be higher than the EUR 16.1 billion of the previous year.

Tips for Ingredients

pnp.de is not responsible for the content of external websites.

document information
Copyright © dpa – German News Agency 2022