Technology

BMW sees 2022 as volatile

BMW is one of the car brands most affected by chip shortages.

To:
Reuters

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Date updated:
August 3, 2022, 17:54 PM

BMW expects year-end deliveries to fall short of last year’s record of 2.52 million units. (BMW)

BMW cut its production forecast on Wednesday, warning of a highly volatile second half, citing energy supply in Europe and chips worldwide as two key factors for the automaker to hit its full-year earnings targets. has been identified. New orders have started to decline, but the order book will remain filled for the next few months, chief executive officer Oliver Zipse said.

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Finance chief Nicholas Peter added that demand for electric models was particularly high. The luxury car maker is on track to meet its goal of doubling all-electric vehicle sales by the end of the year, and expects total sales to grow 5% to 10% in the second half, boosted by a strong Asian market. anticipate, he said.

Still, BMW expects year-end shipments to fall below last year’s record of 2.52 million units.

Tighter sanctions against Russia, disruption of gas supplies or the possibility of an escalation of war in Ukraine were not factored into that forecast.

“A key factor will be how the supply landscape develops, not just semiconductors, but Europe’s energy supply as well,” said Zipse.

Stifel analyst Daniel Schwarz called the company’s outlook “quite disappointing,” while Berstein Research noted how BMW was the first automaker to issue a warning about demand.

Germany and other European Union member states have banned the use of gas amid concerns that Russia may further cut or stop gas supplies to Europe in response to Western sanctions over its aggression against Ukraine. We have adopted an emergency plan to contain it.

BMW consumes around 3,500 gigawatt hours of energy annually in Germany and Austria, three quarters of which comes from natural gas.

Instead of producing about 500 gigawatt hours of electricity annually from gas-powered combined heat and power plants, Zipse said, automakers could buy power elsewhere. Replacing the gases used in the manufacturing process becomes more complicated.

“Partial compensation is possible … even if it works, it will certainly cost you.

Business conditions for German automakers began to deteriorate in July, with order backlogs shrinking and price expectations plummeting, according to a survey conducted Wednesday by Germany’s Ifo Institute.

BMW hits a more negative note than its competitors Mercedes-Benzlast week raised its earnings outlook for the year after gains and earnings increased in the second quarter despite lower unit sales.

The Munich-based automaker’s second-quarter earnings fell 31% to €3.4 billion ($3.46 billion) despite higher revenues, with Refinitiv citing eight analysts. This is still above the forecast of 3.13 billion euros in the survey conducted for the subject.

The integration of the Chinese joint venture BMW Brilliance Automotive led to an increase in first-half revenues, but a decline in second-quarter revenues. BMW said its car profit margin was 8.2%, down from 15.8% last year.

Overall, the revaluation of shares in the Chinese joint venture increased pre-tax income by €7.7 billion in the first half.

First issue date: August 3, 2022 at 17:54 PM (IST)

https://auto.hindustantimes.com/auto/cars/bmw-sees-volatile-2022-with-chips-and-energy-squeeze-in-focus-41659529255339.html BMW sees 2022 as volatile

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