German automaker BMW AG yesterday said that strong demand for its premium brands enabled it to lift profits in the first quarter of the year, even though supply chain bottlenecks and COVID-19 lockdowns weighed on sales.
BMW said in a statement that its bottom-line net profit soared by 260 percent to 10.2 billion euros (US$10.8 billion) in the period from January to March.
The rise was attributable to the consolidation of BMW’s Chinese joint venture, BMW Brilliance Automotive, the automaker said.
Photo: AFP
Stripping out that effect, underlying earnings — as measured by operating profit — were also higher, rising by 12.1 percent to 3.4 billion euros in the January-March period.
“The BMW group further strengthened its competitive position as well as its profitability in the first quarter of 2022, thanks to sustained demand for its premium vehicles,” the statement said.
“However, despite full order books, global supply bottlenecks for components meant that customer demand could not be met in full,” BMW said.
“The situation was also exacerbated by the spread of coronavirus, to which China in particular reacted with the introduction of stringent countermeasures and a renewed lockdown,” it added.
In all, BMW sold nearly 597,000 vehicles during the three-month period, 6.2 percent fewer vehicles than a year earlier.
On the back of the strong first quarter, BMW said it would maintain its guidance for the year, aiming for an operating margin of between 7 and 9 percent, and steady unit sales, despite “high volatility” linked to the Russian invasion of Ukraine.
BMW warned that the risk of shortages in semiconductors would persist.
US-European automaking giant Stellantis NV yesterday also reported rising first-quarter revenues despite selling fewer vehicles in a market hobbled by parts shortages.
The group took in 41.5 billion euros in sales in January-March, up 12 percent on the year before, it said in a statement.
At almost 1.4 million vehicles over the three months, unit sales were down 12 percent, with the manufacturer blaming “unfilled semiconductor orders.”
Stellantis finance director Richard Palmer said in a call with reporters that sales “improvement in the second half will be driven by a sequential improvement in semiconductors supply” — although “the level of impact depends on individual supplier issues and is quite unpredictable.”
He added that Stellantis was not very exposed to fallout from Russia’s invasion of Ukraine.
Europe’s second-largest auto group’s market share in the 27-nation EU fell to 20 percent in the first quarter, with weak shipments for Jeep, Peugeot and Fiat.
It reported that sales of electric vehicles in the bloc were up 50 percent.
In North America, new Jeep-branded sport utility vehicles brought in higher unit sales and revenues.
Although Stellantis expects sales to continue to fall in Europe, bosses aim to achieve a “double digit” adjusted operating profit margin this year.
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