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BERLIN (Reuters) -German premium carmaker BMW reported better than expected quarterly net profit on Thursday thanks to high car prices but warned that rising inflation and interest rates would start to weigh on sales in the coming months.
The higher profit comes despite lower sales volumes as supply chain issues including the semiconductor chip shortage that has curtailed output for carmakers globally.
“Our solid third-quarter results underline that flexibility creates resilience … we are on track to meet our targets for the year,” Chief Executive Oliver Zipse said in a statement.
Resilient demand and low inventories have allowed BMW and other carmakers to raise prices, but with recession risks rising and central banks raising interest rates, analysts have predicted that consumers will start reining in major purchases.
BMW warned that rising inflation and interest rates will hit consumer purchasing power in the coming months and that its above-average order books are ecpected to “normalise, especially in Europe”.
However, finance chief Nicolas Peter said that BMW expects its “positive momentum” to continue in 2023, with full-year sales slightly lower than in 2021 while sales of fully electric vehicles should double.
The company said its full-year operating margin forecast remains within a range of 7-9%.
Despite an overall 9.5% drop in sales from the same period last year, the Munich-based carmaker’s third-quarter revenue jumped 35.3% to 37.18 billion euros ($36.49 billion). That compared with analyst expectations of 35.32 billion euros, Refinitiv data shows.
BMW posted pretax profit of 4.1 billion euros, beating analyst forecasts of 3.4 billion euros.
The company said that costs were 2.7 billion euros higher than the same period last year, it said, citing higher raw material and energy costs as well as expenses related to taking majority control of Chinese joint venture Brilliance Auto Group.
($1 = 1.0190 euros)
