BMW AG yesterday stuck to a conservative profit forecast as chief executive Harald Krueger seeks patience to push through a transition to self-driving, electric cars.
While rival Daimler AG upgraded its target to a “significant” gain this year, BMW kept its goal of a “slight” increase in earnings, according to a statement from the Munich-based company.
BMW is to focus on its higher-end models in the coming years, including a new X7 sport utility vehicle (SUV), as it covers the steep costs of developing the vehicles of the future.
Photo: AP
“We expect start-up and marketing costs regarding new models to increase over the course of the year,” BMW chief financial officer Nicolas Peter said in the statement, noting that spending on electric technologies and autonomous features would also be high. “Short-term gain is not the decisive factor for us: we remain focused on sustainable, profitable growth.”
Weighed down by rising expenses, BMW has maintained a cautious approach even after Daimler’s Mercedes-Benz surged past it in sales last year for the first time in more than a decade.
The first steps of BMW seeking to fight back were evident in March, when Krueger outlined plans for 40 new and revamped models.
The offensive includes the X2, a compact sport utility vehicle scheduled for next year, as well as the full-size X7.
Selling more of the lucrative SUVs and top-of-the-line sedans — alongside the revamped bread-and-butter 5 Series — is vital as the manufacturer aims to boost profitability.
BMW’s new flagship, the self-driving electric iNext, is due for release in 2021.
The company’s profit from automaking rose 6.1 percent in the first quarter to 1.87 billion euros (US$2 billion) on the back of climbing sales, the automaker said in the statement, describing the growth as “significant.”
“Despite this stronger-than-expected start to the year, BMW has opted for a conservative approach,” Natixis Securities analyst Georges Dieng said. “We think there was room for a more upbeat message.”
Research-and-development costs jumped 35 percent to 1.32 billion euros during the quarter. That hurt return on sales, which fell to 9 percent from 9.4 percent a year earlier.
Unlike its competitors, BMW has chosen to add electric power trains to existing models rather than design specific electronic vehicles. The company says that approach puts it in a good position to react to changes in demand, as consumers to date have not shown much enthusiasm for “green” technology.
TECH PARTNERSHIP: The deal with Arizona-based Amkor would provide TSMC with advanced packing and test capacities, a requirement to serve US customers Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is collaborating with Amkor Technology Inc to provide local advanced packaging and test capacities in Arizona to address customer requirements for geographical flexibility in chip manufacturing. As part of the agreement, TSMC, the world’s biggest contract chipmaker, would contract turnkey advanced packaging and test services from Amkor at their planned facility in Peoria, Arizona, a joint statement released yesterday said. TSMC would leverage these services to support its customers, particularly those using TSMC’s advanced wafer fabrication facilities in Phoenix, Arizona, it said. The companies would jointly define the specific packaging technologies, such as TSMC’s Integrated
China’s economic planning agency yesterday outlined details of measures aimed at boosting the economy, but refrained from major spending initiatives. The piecemeal nature of the plans announced yesterday appeared to disappoint investors who were hoping for bolder moves, and the Shanghai Composite Index gave up a 10 percent initial gain as markets reopened after a weeklong holiday to end 4.59 percent higher, while Hong Kong’s Hang Seng Index dived 9.41 percent. Chinese National Development and Reform Commission Chairman Zheng Shanjie (鄭珊潔) said the government would frontload 100 billion yuan (US$14.2 billion) in spending from the government’s budget for next year in addition
Sales RecORD: Hon Hai’s consolidated sales rose by about 20 percent last quarter, while Largan, another Apple supplier, saw quarterly sales increase by 17 percent IPhone assembler Hon Hai Precision Industry Co (鴻海精密) on Saturday reported its highest-ever quarterly sales for the third quarter on the back of solid global demand for artificial intelligence (AI) servers. Hon Hai, also known as Foxconn Technology Group (富士康科技集團) globally, said it posted NT$1.85 trillion (US$57.93 billion) in consolidated sales in the July-to-September quarter, up 19.46 percent from the previous quarter and up 20.15 percent from a year earlier. The figure beat the previous third-quarter high of NT$1.74 trillion recorded in 2022, company data showed. Due to rising demand for AI, Hon Hai said its cloud and networking division enjoyed strong sales
Protectionism: US trade chief Katherine Tai said the hikes would help to counter unfair trade practices from China, while boosting domestic clean energy investments US Trade Representative Katherine Tai (戴琪) defended stiff tariff hikes against countries such as China, saying that paired with investment, they were a “legitimate and constructive” tool for reinvigorating domestic industries. Tai’s comments come a week after sharp tariff increases on Chinese electric vehicles (EVs), EV batteries and solar cells took effect — with levies down the line on other products also recently finalized. The latest moves targeting US$18 billion in Chinese goods come weeks before next month’s US presidential election, with Democrats and Republicans pushing a hard line on China as competition between Washington and Beijing intensifies. In an interview on Thursday
RSS