BMW sees risky 2022 with chips and vitality squeeze in focus

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BERLIN, Aug 3 (Reuters) – BMW (BMWG.DE) lowered its output forecast and warned of a extremely risky second half on Wednesday, pinpointing provides of vitality in Europe and chips worldwide as the 2 essential elements to the carmaker hitting full-year earnings targets.

New incoming orders have been starting to fall however order books remained crammed for the subsequent few months, chief government Oliver Zipse mentioned.

Demand for electrical fashions was notably excessive, finance chief Nicolas Peter added. The premium carmaker was on observe to fulfill its objective of doubling all-electric automobile gross sales by yr finish and anticipated whole gross sales development of 5% to 10% within the second half boosted by sturdy Asian markets, he mentioned.

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Nonetheless, BMW expects year-end deliveries to fall in need of final yr’s file highs of two.52 million.

Tightening sanctions on Russia, interruption of gasoline provide or the potential for the warfare in Ukraine spreading weren’t factored into its forecast.

“The essential issue might be how the provision scenario develops – not only for semiconductors, but in addition vitality provides in Europe,” Zipse mentioned.

BMW shares have been down 4.9% at 0931 GMT.

Daniel Schwarz, analyst at Stifel, known as its outlook “quite disappointing” whereas Berstein Analysis famous how BMW turned the primary carmaker to sign warning about demand.


A BMW iX Move with color-shifting materials is displayed throughout CES 2022 on the Las Vegas Conference Middle in Las Vegas, Nevada, U.S. January 6, 2022. REUTERS/Steve Marcus

Germany and different European Union members have adopted emergency plans to curb gasoline use amid fears that Russia might additional reduce or cease supplying gasoline to Europe in response to Western sanctions over its invasion of Ukraine. learn extra

BMW consumes round 3,500 gigawatt hours of vitality yearly in Germany and Austria, three-quarters of which comes from pure gasoline.

The carmaker might exchange the round 500 gigawatt hours of electrical energy produced per yr from gas-powered mixed warmth and energy crops by shopping for electrical energy from elsewhere, Zipse mentioned. Changing gasoline utilized in manufacturing processes could be extra complicated.

“Partial compensation is feasible… even when it really works, it can actually be costly. There is no such thing as a means we will keep the prices per kilowatt hour,” he added.

A survey by Germany’s Ifo institute on Wednesday confirmed German carmakers’ enterprise scenario starting to deteriorate in July, with order backlogs shrinking and value expectations plummeting.

BMW struck a extra unfavorable observe than competitor Mercedes-Benz (MBGn.DE), which final week raised its earnings outlook for the yr after earnings and revenues grew within the second quarter regardless of falling unit gross sales. learn extra

The Munich-based carmaker’s earnings fell 31% within the second quarter to three.4 billion euros ($3.46 billion) regardless of rising revenues, nonetheless beating a 3.13 billion euro forecast in a Refinitiv ballot of eight analysts.

The consolidation of its China three way partnership BMW Brilliance Automotive pushed up revenues within the first half however dampened second quarter earnings, BMW mentioned, reporting an automotive margin of 8.2%, down from final yr’s 15.8%. learn extra

General, the reevaluation of the Chinese language three way partnership shares boosted earnings earlier than tax by 7.7 billion euros within the first half.

($1 = 0.9825 euros)

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Reporting by Victoria Waldersee, further reporting by Maria Sheahan;
Modifying by Tomasz Janowski

Our Requirements: The Thomson Reuters Belief Rules.

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