BMW Reports €3.4bn Profit As Focus Shifts To More Expensive Cars – – Daily Cryptocurrency and FX News

BMW Reports €3.4bn Profit As Focus Shifts To More Expensive Cars – – Daily Cryptocurrency and FX News

The carmaker is ‘overcoming difficult situations, including global shortage of computer chips.

In the third quarter of 2021, BMW earned bigger profits than expected after a focus on more expensive cars and electric vehicles helped the German premium carmaker to ride out a global shortage of computer chips.

On November 3, BMW said that compared with 2021, profits before tax rose to €3.4bn (£2.9bn) between July and September, a 38% increase, and a 52% increase in 2019 before the coronavirus pandemic hit.

Despite a 12% year-on-year decline in overall vehicle sales to 593,000, the German car manufacturer recorded the profit rise, as it switched production to higher-margin cars such as the x7 sports utility vehicle (SUV). Revenues rose by 4.5% to €27bn.

Seeing that demand for electronics soared after the short-lived plunge as the coronavirus first hit, carmakers have been caught out during the global shortages of computer chips, which are made from semiconductors. Carmakers cut orders in anticipation of lower sales, leaving them exposed when sales recovered since they rely increasingly on computer chips to control everything from air conditioning to electric car batteries.

The company was “overcoming difficult situations”, including the lingering effects of the coronavirus pandemic and the situation with semiconductor supplies, Oliver Zipse, BMW’s chief executive explained.

With sales doubling between January and September, He added that sales momentum for electric and plug-in hybrid cars was particularly strong. Moreover, over that period, 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 was confident that BMW would continue to make significant gains in electric vehicle sales in 2022. The company said that the orders for new electric cars, including the iX SUV and the i4 saloon, remained strong.

The company’s ability to ride out the shortages contrasted to some of the difficulties of other carmakers and particularly their suppliers. However, given the European car industry’s reliance on imports from countries such as Taiwan and South Korea, Zipse said that more investment was required in Europe in semiconductor manufacturing.

Last week, BMW’s German rival, Volkswagen 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 Volkswagen’s premium brand, Audi boss 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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