Wapcar – BMW (BMWG.DE) lowered its output forecast and warned of a volatile second half on Wednesday, pointing to global chip supplies and European energy as two key factors for the manufacturer. Automobile production reached the annual profit target, CEO Oliver Zipse said.
New orders started to fall but order books remained full in the following months. Demand for electric vehicles is particularly high, so they decided to put much emphasis on such car models of BMW for sale in the market, added Chief Financial Officer Nicolas Peter. The premium carmaker is on track to achieve its goal of doubling sales of all-electric cars by year-end and expects total sales growth of between 5% and 10% in the second half of the year. driven by strength in Asian markets, he said.
However, BMW expects year-end deliveries to be lower than last year’s record 2.52 million units. The tightening of sanctions against Russia, the disruption of gas supplies or the potential spread of war in Ukraine were not included in his forecast.
What matters is what measures should we take to deal with the issue of supply chains, which is not only concerned with semiconductors but also a hot topic on energy supply in Europe, Zipse said.
At 0931 GMT, BMW shares decreased 4.9%.
When Bernstein Research noted how BMW has become the first automaker to take measures to deal with a soft demand, Daniel Schwarz, an analyst at Stifel, said that its outlook cannot satisfy people’s desires.
ENERGY EMERGENCY PLANS
A BMW iX Flow with color-changing materials is on display during CES 2022 at the Las Vegas Convention Center in Las Vegas, Nevada, US,
Germany and other members of the European Union have adopted contingency plans to limit gas use amid concerns that Russia could further reduce or stop supplying gas to Europe in response. These countries are influenced due to Russia’s invasion of Ukraine.
BMW consumed about 3,500-gigawatt hours. the energy each year in Germany and Austria, three-quarters of which comes from natural gas.
Automakers can replace about 500 gigawatt-hours of electricity produced annually from combined gas-fired power and heat plants with purchasing power elsewhere, Zipse said. Replacing the gas used in manufacturing processes will be more complex.
It is of possibility that there will be partial compensation even if it could work normally. There’s no way we can keep costs per kilowatt-hour down,” he added. BMW scored more negative than rival Mercedes-Benz (MBGn.DE), which last week raised its earnings outlook. year after profit and revenue rose in the second quarter despite lower unit sales profit fell 31% in the second quarter to 3.4 billion euros (3.46 billion euros).
The consolidation of the BMW Brilliance Automotive joint venture in China boosted first-half revenue but dented second-quarter profit, BMW said, reporting an auto industry profit margin of 8.2%, down from a year earlier. 15.8% last year.
Overall, the revaluation of shares in the Chinese joint venture increased pre-tax profits by 7.7 billion euros in the first half of the year.
($1 = 0.9825 euros)