Wednesday, November 03, 2021
Sold less, earned more
BMW defies the chip crisis
The automotive industry has been suffering from the semiconductor shortage for a long time. At BMW, too, production and sales decline in the third quarter. However, the group benefits: Due to increased sales prices, it recorded a significantly higher profit.
The car manufacturer BMW earned more in the past quarter despite the delivery bottlenecks for electronic chips. The surplus increased by 42 percent compared to the same quarter of the previous year and reached a record value of 2.58 billion euros. The semiconductor shortage has shortened the vehicle supply, so that BMW was able to enforce higher prices for its new and used cars, the company announced in Munich. Chief Financial Officer Nicolas Peter said: “We are on the finish line for our annual forecast and look to the future with confidence.”
Because production in the factories repeatedly stalled due to the semiconductor shortage, the BMW Group sold only 593,200 cars between July and September, twelve percent fewer than in the third quarter of the previous year. But the semiconductors were mostly built into more expensive, more profitable models, and because of the lower supply, BMW had to give customers fewer discounts. Returning leasing vehicles were also worth more.
In the first nine months of the year as a whole, sales figures for electric vehicles and plug-in hybrids rose in particular. Overall, the segment grew by around 98 percent compared to the previous year, the growth in purely electric vehicles was particularly high with a plus of a good 121 percent. “For us, technological change is a great opportunity to sustainably strengthen our business model,” said CEO Oliver Zipse.
Consolidated sales rose in the third quarter, contrary to the expectations of many analysts, by 4.5 percent to 27.47 billion euros. The risk of default on auto loans decreased. The group result before taxes rose by 39 percent to 3.4 billion euros, after taxes remained 2.6 billion. CFO Peter said: “We expect that semiconductor supply will continue to occupy us beyond 2021.” For the year as a whole, deliveries should be “solidly above the level of the previous year” and the consolidated result should be “significantly higher than the previous year’s figure”.
After nine months, BMW has already set new records for deliveries, sales and consolidated earnings – with 1.932 million cars sold, sales of 82.8 billion euros and earnings of 13.2 billion euros before taxes.