Auto industry
BMW profits collapse
Problems with the brakes of 1.5 million cars and falling demand in China – the third quarter is a blow in the office for the Munich car manufacturer. He wants to make up some ground by the end of the year.
BMW has suffered a massive drop in profits due to problems with brakes and falling sales in China. The consolidated profit in the third quarter fell by 84 percent to 476 million euros. The share fell significantly and was one of the biggest losers in the DAX index. CEO Oliver Zipse said: “In the fourth quarter, despite the high level of planned advance work, we are once again on course for a stronger result in order to achieve our annual targets.” The car manufacturer had already revised it downwards in September.
Due to technical problems with brake parts from supplier Continental, BMW has to recall 1.2 million cars and cannot deliver 320,000 new cars. “That’s why we have set aside a sum in the high three-digit millions,” said CFO Walter Mertl. For most new cars, parts replacement will be completed by the end of the year. In the current fourth quarter, sales and profits are significantly better, said Mertl.
In China, BMW sales fell by 30 percent to 148,000 cars. This means that BMW only sells a quarter of its cars there. At least half of the decline in sales in China is due to the delivery stop because of the brakes, said Mertl. However, BMW is also feeling subdued demand. Prices are under pressure and fluctuate greatly. This is likely to continue until the end of the year. BMW now supports its dealers with discounts and liquidity.
With regard to possible tariffs by the USA on cars from Europe, Zipse appeared calm: The second largest BMW factory in the world is the SUV factory in Spartanburg. Most BMW cars sold in the United States are produced in the United States.
At the same time, Zipse criticized the EU’s planned punitive tariffs for Chinese electric cars. The fact that the EU is restricting free trade is a “shot in the foot” because it is slowing down the ramp-up of e-mobility in Europe and could also lead to countermeasures. BMW no longer imports the iX3 electric SUV from China into the EU, but it does import the new electric mini models Cooper and Aceman.
Overall, group sales fell by 13 percent to 541,000 cars in the third quarter. Sales fell by 16 percent to 32.4 billion euros, and operating earnings before interest and taxes (EBIT) fell by 61 percent to 1.7 billion. The EBIT margin in the automobile division, i.e. the portion of sales that remains as operating profit, remained well below its own targets at 2.3 percent.
For the year as a whole, BMW expects a slight decline in sales, an EBIT margin of 6 to 7 percent and a significant decline in profit before taxes. Last year, BMW sold 2.55 million cars, achieved an EBIT margin of 9.8 percent and generated profit before taxes of 17.1 billion euros.
E-car growth driver
Battery cars (BEVs) continue to be a growth driver for BMW – in contrast to other car manufacturers. The group now has 15 fully electric models on offer, sells 17 percent of its cars as battery-powered vehicles (BEVs) and expects “another significant increase” next year. Pre-series production of the first “New Class” SUV car with completely new electric drives and comprehensive digitalization has begun in the new Hungarian plant in Debrecen, assembly of the first sedan is being prepared at the main plant in Munich, and pre-series production of the electric motor housings is underway at the Landshut plant The “New Class” started, and the battery factory was built in Irlbach-Straßkirchen in Lower Bavaria.
dpa
Source: Stern
