BMW AG expects that the returns for its automobile manufacturer will be “resilient” this year, as the rising commodity prices put profits at risk.
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The profitability for its core automotive manufacturing operations will likely reach the upper end of the 6% to 8% range that BMW had forecast for the year. While the automaker's margin increased and reached 9.8% in the first quarter, the manufacturing company warned that rising raw material prices could have a slowing effect in the future.
«We continue to optimize our processes and structures in order to enhance performance», said Chief Financial Officer Nicolas Peter.
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After posting record sales in the first quarter – led by China – BMW is feeling the pressure from supply chains as the global economy picks up speed. Everything from chips to copper to lithium is harder or more expensive to source, and automakers have few short-term solutions other than raising prices for consumers. The semiconductor is expected to continue into next year, with some factories shutting down for weeks.
BMW had largely escaped the chip problems until last week when it was forced to cut shifts at two factories in England and Germany. Volkswagen AG and Jeep maker Stellantis NV warned this week that the shortage would worsen from the first three months of the year, while Ford Motor Co. has forecast a $2.5 billion profit.
The higher sales of the X5 and X6 SUV models helped boost BMW's performance in the first quarter.
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Vehicle sales in the first quarter increased by more than a third to almost 637.000 cars, as deliveries in China almost doubled.
Information source: bloomberg.com
