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LONDON (Reuters) -BMW remains on course to meet its profit targets for 2021 despite rising raw material costs, the German carmaker said on Friday, having largely steered clear of the semiconductor chip shortage battering rivals like Volkswagen (DE:VOWG_p).
Volkswagen boss Herbert Diess had said on Thursday that Europe’s top carmaker was in “crisis mode” over the chip shortage, which would hit profits in the second quarter, while Ford Motor (NYSE:F) Co last week said the lack of chips could halve its second-quarter vehicle production.
BMW is known for its strong relations with suppliers and has been working with them to avoid disruptions. Aside from a temporary shutdowns of MINI production in the United Kingdom, the carmaker has not been affected.
BMW said that sales of its electrified vehicle models more than doubled in the first quarter, when it also benefited from higher prices and strong demand in China.
BMW had already reported a 370% jump in pre-tax profit as it bounced back more strongly than expected from a pandemic-ravaged first quarter last year.
Sales in China almost doubled in the first quarter versus the same period in 2020, the company said.
Rebounding demand from consumers in China in the second half of last year helped BMW and its German rivals Volkswagen AG (OTC:VWAGY) and Daimler AG (DE:DAIGn) post solid profits for 2020 despite the global coronavirus pandemic.
BMW also saw solid first-quarter growth in other regions, including a 17.4% jump in sales in North America, driven by strong demand from U.S. drivers.
“The first quarter shows that our global business model is a successful one, even in times of crisis,” Chief Executive Officer Oliver Zipse said in a statement. “We remain firmly on track for continued sustainable, profitable growth.”
Most of the auto industry has been hit by a global semiconductor chip shortage, shuttering many assembly plants, driving down inventories and pushing up prices for both new and used vehicles.
The German carmaker said that its first-quarter results also received a boost from the sale of previously leased vehicles, in particular in the U.S. market.
The carmaker said that it expects to have 2 million fully-electric cars on the road by 2025.
BMW said it expects the pre-tax margin for its core autos business to come in at the upper end of its previous forecast of between 6% and 8%.
