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German car manufacturer BMW car on Wednesday set targets for slightly increasing margins for its auto segment and increasing deliveries this year, as it ramps up rollout of its electric vehicle fleet.
The company said it expects EBIT margins (earnings before interest and taxes) in the range of 8-10% for its automotive product line in 2023, with deliveries set to be at slight increase from 2022 and “the selling price remained stable.” It forecasts the used car market will normalize this year “due to an increase in the number of new cars.”
Shares of BMW were up 1.07% at 8:20 a.m. London time following the announcement.
“The high level of flexibility, combined with our operational performance, has proven to be an effective combination to ensure the success of the BMW Group, even in the face of headwinds and headwinds. take advantage of opportunities for profitable growth,” Oliver Zipse, Chairman of the BMW board of directors of BMW AG, said in a press release.
Like its rivals, BMW is facing global semiconductor shortages and supply chain disruptions, challenging it to fulfill orders placed.
The company has confirmed the results for the whole year 2022 last week’s report, which includes an EBIT of 10.6 billion euros ($11.4 billion) for the automotive segment, which had an 8.6% profit margin last year. The company announced automation cash flow of nearly 11.1 billion euros.
It has therefore proposed a dividend of 8.50 euros per common share, compared with a payout of 5.80 euros for the same share in the previous year.
“We’re not looking at a driving trend or a segment or a region of the world and I think, for us, this fits very well with what we were talking about a few years ago,” Zipse said. with CNBC. “And now we’re working on this. And it looks like the plan we’re working on here is quite successful in terms of revenue, as well as market share.”
He emphasized that BMW’s strategy will continue to prioritize profits, minimizing the impact of high inflation rates on consumer demand,
“Inflation really has an input or not is a matter of whether you have the power to set prices in the market,” he notes. “Given the global approach we have here, I would be cautiously optimistic about this year and we will have a slight increase in volume.”
Company appointment announcement of a new CFO on March 9, with Walter Mertl taking over the role in May after Nicolas Peter’s retirement at that time.
BMW’s results follow a flurry of upbeat announcements from automakers earlier in the week, with Porsche offering the following ambitious growth outlook. record earnings in 2022 and Volkswagen set out a plan to invest $193 billion in 5 years.
push green
BMW predicts that the main growth drivers of its business this year will be premium models and all-electric vehicles (BEVs).
“Depending on prevailing market conditions in the second half of the decade, developments in raw material prices and availability, and the pace at which a comprehensive charging infrastructure is built, the BMW Group expects will reach more than 50% of the BEV market share by 2030,” the company said, after signaling its BEV share would reach 15% by 2023.
BMW plans to deliver 2 million all-electric vehicles by 2025 and more than 10 million by 2030. The automaker’s first MINI-branded electric vehicles will hit the market. this year, after Rolls-Royce launched its first all-electric model. Rolls-Royce Specter in 2022 and will reach customers in 2023.
The automaker has ramped up efforts to transition to electric vehicles, announcing in October that it is looking to invest $1.7 billion in its U.S. operations to build such cars and batteries. It introduced a pilot team of hydrogen vehicles this early year.
