BMW Group is doing very well, but worries about the chip shortage
In the first half of this year, BMW Group has registered a net benefit of € 7,6 billion. Nevertheless, the company worries about the semi-conductors shortage and fears its impact for the next half of this year.
The net benefit has been heightened by a million because the fine the BMW Group has to pay together with Volkswagen is far less than expected. BMW foresaw € 1,4 billion in 2019 given the EU fine, but it finally has to pay € 373 million.
Therefore, the group has raised its profitability prevision: the operating margin has to turn around 7 to 9% instead of 6 to 8% mentioned earlier. In the first half of the year, this margin was almost 13% (compared to -4% for the same period in 2020, due to the pandemic).
The worldwide semi-conductors shortage will undoubtedly affect the results for the second half of the year. BMW Group has managed to compensate for the shortage, but this won’t last long anymore.
“The longer this shortage, the more tension there will be,” says BMW Group CFO Nicolas Peter. “We are awaiting further shortage restrictions in the second half of the year, and this will undoubtedly have an impact on our sales,” Peter continues. “Without this, we could sell 70 000 to 90 000 additional cars.”
Accordingly, BMW Group is cautious with its forecast for the entire year. The more so because the price of raw materials is also booming. For the second half of 2021, BMW expects a net benefit of € 4,8 billion (compared to a € 212 million loss in 2020).
Total turnover (at € 55,4 billion for the first half of the year) has progressed 28%, while it was even more in the second quarter of this year with +43%. Nevertheless, practically all car manufacturers see their share value reduced because of their rather pessimistic forecasts for the second half of the year.
Since the beginning of the year, the sales of electrified cars (BEVs or PHEVs) have progressed by 150% and totaled 153 200 units. By the end of the year, BMW Group expects to breach the 1 million barrier in sales of electrified vehicles since it began to sell them with the venue of the i3 and the i8.
Number one in the premium segment
In total, BMW Group has sold 1,34 million cars between January and June of this year (+39,9% compared to 2020). 1,18 million of them were BMW cars, therefore beating its main German competitor Mercedes-Benz which sold 1,04 million cars (+19,5%) during this first half. Audi remains third, but with almost 982 000 sales, it progressed by 38,8%.