BMW expects its fourth-quarter pre-tax earnings to be significantly below last year and its full-year margin to be in the lower half of its 6-7 per cent target, according to slides posted on the carmaker’s website on January 28.
Inflation and higher fixed costs from unwinding inventory hit its earnings in the last three months leading to a year-on-year margin decline.
The slides were presented during a call with investors that was not open to the press during a closed period on company information ahead of its annual results, which will be released on March 14.
The premium carmaker said it does not see a return to its previous profitability target of 8-10 per cent this year due to high raw material costs, new model rollouts and persistent weak demand in China, according to a Bernstein note to clients published after the call.
This aligns with the current consensus estimate, the note added.
The group is close to fully resolving a brake issue that has affected more than 1.5 million cars worldwide, hitting full-year earnings, the note said. The issue will not affect them in 2025, it added.
BMW’s CEO Oliver Zipse said on January 28 at a conference in Berlin that the company will propose this week that the European Union lower its tariff on US car imports to 2.5 per cent from 10 per cent in line with the current US import tariff.
On January 24, the German car giant joined Chinese producers in filing a class challenge at the Court of Justice of the European Union against EU tariffs on China-made electric vehicles.
The German automaker cut its outlook for the year to 6-7 per cent from 8-10 per cent in September and reported a 61 per cent drop in third-quarter profit, missing analyst expectations, because of slumping China sales and brake problems.
The provisional announcement of BMW follows a worrying trend among EU car manufacturers.
In an attempt to understand this trend, Brussels Signal talked to industry lobbyists, car salesmen, politicians and academics in our documentary, Driven to the Edge.
? DOCUMENTARY: Our reporters talk to industry lobbyists, car salesmen, and academics in an attempt to understand where the European car industry is going and whether the EU has made policy mistakes. ⬇️ https://t.co/V0ztLwtdIF
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