BMW lifts outlook, warns inflation and supply issues not over

FILE PHOTO-BMW's concept model i Vision Dee is unveiled during an event at the Auto Shanghai show, in Shanghai, China April 18, 2023. REUTERS/Aly Song/File Photo

BMW lifts annual outlook with improved EBIT margin despite supply chain and inflation challenges. Competitors like Mercedes-Benz follow suit. Solid growth expected in deliveries, but shares drop 3.97%. Full quarterly results on Aug. 3. First-half group margin at 12.6% and automotive EBIT margin at 10.6%. BMW sales up 4.7% YoY.


In the highly competitive automotive industry, BMW, the esteemed carmaker, is poised for remarkable growth and profitability. Mirroring the success of competitors like Mercedes-Benz, BMW has raised its earnings outlook, showcasing its confidence in its products and services. The forecast now indicates an EBIT margin on its cars division between 9%-10.5%, a significant improvement from the previous 8%-10%. Additionally, BMW anticipates solid growth in its deliveries, an upgrade from the earlier forecast of slight growth, bolstered by a robust order bank and enhanced availability of its premium vehicles.

Despite these positive changes, BMW acknowledges the challenges of the current macroeconomic environment and the impact it may have on its operations. As a result, the company has adjusted its forecast for free cash flow to above 6 billion euros, recognizing the need to bolster its inventories and invest more in electrification.

Although the initial market response was not as enthusiastic as anticipated, BMW remains optimistic about its performance, and the company's determination to thrive is evident in the reported preliminary figures. The first half of the year saw a remarkable 12.6% group margin on earnings before taxes and a 10.6% EBIT margin in the automotive segment. These impressive margins were achieved through higher sales and strategic pricing decisions.

BMW's resilience in the face of challenges is evident in its sales growth of 4.7% during the first half of the year compared to the previous year, despite supply chain issues caused by external factors like the war in Ukraine and lockdowns in China.

As we await the full quarterly results, there is no doubt that BMW's unwavering commitment to innovation and excellence will continue to propel it forward in the automotive landscape.

BMW remains steadfast in its commitment to providing cutting-edge vehicles that redefine the driving experience. The company's strategic decision to focus on electrification not only aligns with global sustainability efforts but also positions BMW as a pioneer in the future of automotive technology.

With its upgraded earnings outlook and a strong order bank, BMW is poised to capture a larger market share, solidifying its position as a top player in the automotive industry. The company's dedication to meeting customer demands and improving vehicle availability further strengthens its competitive edge.

While the stock market may fluctuate in response to short-term results, investors can find solace in BMW's track record of sustained growth and profitability. The forthcoming full quarterly results, to be published on Aug. 3, are expected to reaffirm the company's financial prowess and reinforce its status as a sound investment choice.

In summary, BMW's forward-thinking approach, impressive sales growth, and unwavering commitment to excellence make it a compelling choice for investors and car enthusiasts alike. As the automotive landscape evolves, BMW stands tall, ready to drive innovation and shape the future of mobility.