Carmaker is ‘overcoming difficult situations’, including global shortage of computer chips
Last modified on Wed 3 Nov 2021 08.31 EDT
BMW earned bigger profits than expected in the third quarter of 2021 after a focus on more expensive cars and electric vehicles helped the German premium carmaker to ride out a global shortage of computer chips.
Profits before tax rose to €3.4bn (£2.9bn) between July and September, a 38% increase compared with 2020 and a 52% increase on 2019, before the coronavirus pandemic hit, BMW said on Wednesday.
BMW achieved the profit rise in spite of a 12% year-on-year decline in overall vehicle sales to 593,000, as it switched production to higher-margin cars such as the x7 sport utility vehicle. Revenues rose by 4.5% to €27bn.
Carmakers have been caught out during the global shortages of computer chips, which are made from semiconductors, as demand for electronics soared after the short-lived plunge as the coronavirus first hit. Carmakers rely increasingly on computer chips to control everything from air conditioning to electric car batteries but they cut orders in anticipation of lower sales, leaving them exposed when sales recovered.
Oliver Zipse, BMW’s chief executive, said the company was “overcoming difficult situations”, including the lingering effects of the coronavirus pandemic and the situation with semiconductor supplies.
He added that sales momentum for electric and plug-in hybrid cars was particularly strong, with sales doubling between January and September. However, fully electric cars – which do not produce carbon dioxide exhaust emissions, unlike hybrids – only accounted for 60,000 sales over that period, or 3% of total deliveries.
Zipse said he was confident that BMW would continue to make significant gains in electric vehicle sales in 2022. Orders for new electric cars, including the iX SUV and the i4 saloon, remained strong, the company said.
BMW’s ability to ride out the shortages contrasted to some of the difficulties of other carmakers and particularly their suppliers. Nevertheless, Zipse said more investment was required in Europe in semiconductor manufacturing, given the European car industry’s reliance on imports from countries such as Taiwan and South Korea.
Volkswagen, BMW’s German rival, last week reported falling profits because of the semiconductor shortage, while Stellantis, formed this year by the merger between Fiat and Peugeot, said revenues had fallen.
The boss of Audi, Volkswagen’s premium brand, said he expected chip supplies to remain tight at least until summer, while its Skoda brand said production this year would fall by about 250,000 cars.
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