BMW fourth quarter off to good start, sees double-digit 2021 margins

Automotive Industry

Source: Automotive News Europe, 2021-11-16

BMW's October sales came in better than expected and November sales are off to a good start, Chief Financial Officer Nicolas Peter said.

Peter said he expected the automaker to reach the upper end of its 9.5% to 10.5% automotive profit forecast in 2021.

Such margins were unlikely to last, though easing supply chain bottlenecks for semiconductor chips in the second half of 2022 could still boost growth, Peter said at a roundtable with journalists in Frankfurt on 16 November. 

"I would be disappointed if we failed to reach the upper end of our current margin target," Peter said.

BMW has navigated turmoil from the chip shortage better than other automakers, and in late September went against the tide of warnings to raise profit expectations.

Prices of used cars it sells in the US and Europe have climbed due to the shortage of new vehicles available, supporting its margins even as production sputters.

"Against a backdrop of high consumer demand, we will also raise new-car prices by 1% next year," Peter said.

BMW expects electric vehicle sales to at least double in 2022, Peter said.

He added that BMW had already secured battery cell supply until 2025 and is negotiating with manufacturers about contracts for the second half of the decade.

Peter also said BMW's planned increase of its stake in China joint venture BMW Brilliance to 75% from 50% should take place in the first quarter of 2022, when the country drops the rule blocking foreign ownership of more than 50% of local companies.

In early November 2021, BMW reported a 42% increase in third-quarter net profits to €2.58bn ($2.93bn) as strong electric vehicle sales and higher prices offset lower deliveries amid chip supply issues.

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