The operating profit (EBIT) improved by almost 50 percent to 2.88 billion euros, which is also significantly better than expected.
(Photo: dapd)
Munich More luxury cars, fewer discounts: BMW presents a strong balance sheet for the third quarter. The Bavarian DAX group was able to record a “new high” in sales and profit from July to September despite shrinking vehicle sales. Specifically, the Munich-based company increased its revenues by 4.5 percent compared to the previous year – to 27.5 billion euros. Earnings before interest and taxes shot up from 1.9 to 2.9 billion euros. An increase of almost 50 percent.
The bottom line is that BMW generated a consolidated surplus of almost 2.6 billion. This corresponds to an increase of around 42 percent compared to the third quarter of 2020. “The BMW Group shows how profitability and transformation go hand in hand. For us, technological change is a great opportunity to sustainably strengthen our business model ”, exulted BMW boss Oliver Zipse.
The manager wants to organize BMW “future proof”. In return, the share of all-electric models in total sales is expected to climb from currently around three percent to over 50 percent by the end of the decade. Zipse also wants to reduce the CO2 footprint of its vehicles by 40 percent by 2030 compared to the 2019 level, for example by drastically increasing the recycling rate. After all, sustainability goes far beyond switching to electric drives, according to Zipse.
At the moment, his company still earns most of its money with diesel and gasoline engines. After nine business months, BMW was able to almost quintuple its net profit to 10.2 billion euros, mainly thanks to the combustion engine. The return on sales in the dominant auto division is a proud 11.3 percent. Better still: The segment’s free cash flow amounts to 6.3 billion euros. Nothing stands in the way of paying an adequate dividend to the shareholders.
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The core of the good results from BMW is a “better product mix” and “good price enforcement”, explained the group. Specifically, this means: BMW, like Daimler and other car companies, recently steered all available chips into the production of its particularly lucrative SUVs, heavy sedans and sports cars.
BMW sells more cars, Mercedes less
For example, sales of the luxury brand Rolls-Royce rose disproportionately by 63 percent to 4,300 units. The sales of the tuning subsidiary BMW M GmbH also increased strongly by more than a fifth to 123,000 units as of September. Overall, BMW has so far mastered the semiconductor crisis best among the three large domestic car companies.
The Munich-based company only had to accept a minus of twelve in new car sales in the third quarter, while sales of arch-rival Mercedes-Benz fell by almost a third and that of Volkswagen by a quarter.
After nine business months, BMW recorded an increase in sales of almost 18 percent with more than 1.93 million units. For comparison: Mercedes sales recently stagnated at 1.6 million vehicles sold. This means that in 2021, for the first time in years, the Swabians are likely to deliver fewer cars than their Bavarian competitor. In other words: BMW is about to replace Mercedes as the largest premium manufacturer in the world.
In terms of profitability, however, the brand with the star is currently still slightly ahead. Daimler’s auto division recorded a margin of 11.8 percent after three quarters – half a percentage point more than BMW. Historically, of course, both premium manufacturers shine with an unprecedented level of profitability.
BMW confirmed its annual targets, according to which the automobile margin should be up to 10.5 percent after twelve months. “We are on the finish line for our annual forecast and look confidently to the future,” said Chief Financial Officer Nicolas Peter. However, the manager assumes that the shortage of microchips will continue in 2022. But the worst seems to be over.
Expert: Tesla will overtake BMW
Experts at BMW tend to warn of medium-term risks anyway. “The market for battery electric cars is developing much faster than some of the BMW board members could have imagined. For too long, people have relied on plug-ins and hybrid platforms and pushed the superior skateboard architectures back, ”criticized Ferdinand Dudenhöffer. The head of the Center Automotive Research (CAR) assumes that the American electric car pioneer Tesla will overtake the Munich-based company in terms of sales before 2030.
For the year 2022 alone, Tesla has standard battery capacities for more than 1.5 million units, said Dudenhöffer. In addition, a Tesla order for iron phosphate cells from the Chinese supplier CATL for a good 800,000 vehicles is being discussed. And then Tesla production will soon start in Grünheide near Berlin. “The time for BMW is getting tight”, believes Dudenhöffer.
The industry expert is convinced that BMW, like Mercedes, would have to switch to a purely electric fleet much faster in order to be able to stand up to attackers such as Tesla, Lucid or Nio in the future. BMW boss Zipse, on the other hand, thinks little of giving up the combustion engine prematurely. The hope that soon everyone in Germany and elsewhere will only be driving electrically will “not come true”, the manager said recently in an interview with “Spiegel”. The reason: “The charging infrastructure is not being expanded at the same speed as the product range for e-cars.”
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