Amid volatile second half, BMW sees a full-year drop in output
Amid volatile second half, BMW sees a full-year drop in output
Share:

BMW pinpointed supplies of energy in Europe and microchips worldwide as the two crucial factors to the automaker hitting full-year earnings targets, which resulted in its lowered output forecast and warned of a highly volatile second half. 

The company expects a solid sales increase in the second half but said full-year deliveries will fall short compared to last year's record highs of 2.52 million. Tightening sanctions on Russia, interruption of gas supply or the possibility of the war in Ukraine spreading were not factored into its forecast, per Bloomberg.

 CEO Oliver Zipse on Wednesday during an earnings call said, "Semiconductor supply difficulties remain the dominant and decisive issue for our sales,". Second-quarter earnings before interest and taxes fell 31 per cent to 3.4 billion euros ($3.46 billion) despite growing revenue.

"The crucial factor will be how the supply situation develops – not just for semiconductors, but also energy supplies in Europe," Zipse said.

BMW increased its stake in its joint venture with Brilliance Auto Group to 75 per cent from 50 per cent in February after securing the necessary license from Beijing to take majority control.

"BMW is the first manufacturer to signal caution on the demand front," analyst Daniel Roeska of Bernstein Research said in a note. "A warning for year-end 2022 likely implies that BMW is already seeing weakening consumer demand today."

A survey by Germany's Ifo institute on Wednesday showed German carmakers' business situation beginning to deteriorate in July, with order backlogs shrinking and price expectations plummeting.

BMW struck a more negative note than competitor Mercedes-Benz, which last week raised its earnings outlook for the year after profits and revenues grew in the second quarter despite falling unit sales.

‘We Don’t Need to Decide Now’, Lamborghini CEO on Going All Electric

New Maruti Baleno SUV Coupe Spied, Debut At 2023 Auto Expo

Indian auto industry posts robust growth in July

Join NewsTrack Whatsapp group
Related News