development not foreseeable
BMW starts the year brilliantly and remains skeptical
05/04/2023 4:26 p.m
The car manufacturer BMW is working extremely productively at the beginning of the year. The target for the margin is clearly exceeded. Thanks to the global presence, regional weaknesses can be compensated for. But the uncertainties remain extremely high.
After a surprisingly strong start to the year, carmaker BMW is preparing for a headwind. “Our environment remains highly volatile and is highly likely to be shaped by unforeseeable events,” said BMW boss Oliver Zipse. Experts assumed that the large economic areas tended to drift further apart – politically, technologically and in their legislation. BMW is benefiting from its global positioning: a market weakness in China can currently be offset by stronger development in the USA. Volkswagen has also recently benefited from better business in North America.
All in all, things went better than expected at the start of the year for Munich. BMW once again benefited from the stable prices for new and used cars. Above all, top models and electric cars are in demand. Revenue for the year increased by 18.3 percent to 36.9 billion euros, mainly thanks to the full inclusion of the China business. The net profit collapsed by almost two thirds to 3.7 billion euros. However, it was noticeable that a one-off valuation effect due to the full consolidation of the China business from the previous year was no longer applicable. Analysts had expected lower sales and profits.
The profit margin in the car business, which is important for the company, improved to 12.1 percent after 8.9 percent in the previous year and was thus above the company’s own target of eight to ten percent. Nevertheless, the Munich team did not raise their forecast. “We’ve started the year well, but there are 12 months in the year so we’re not even halfway through,” said outgoing CFO Nicolas Peter. That’s why it’s too early to talk about adjustments. Bernstein analyst Daniel Roeska said BMW is known for its extremely conservative forecasts.
However, Peter emphasized that the margins were achieved under persistently volatile conditions. “The geopolitical and macroeconomic situation remains tense.” Inflation rates and interest rates in important markets were at a high level, as were the costs of materials and raw materials.