The article below is sourced from Bloomberg Wire Service. The views and opinions expressed in this story are those of the Bloomberg Wire Service and do not necessarily reflect the official policy or position of NADA.
BMW AG’s first-quarter earnings beat expectations on strong sales of its most expensive cars, though the company left its 2023 outlook unchanged as the softening global demand threatens to erode orders across the industry.
The carmaker reported an automotive earnings margin of 12.1%, surpassing analyst estimates and the 8.9% it logged for the same quarter in 2022. The results followed an announcement late Wednesday that BMW aims to boost earnings per share with a new €2 billion ($2.2 billion) share buyback program.
BMW shares traded 2.5% higher as of 10:05 a.m. in Frankfurt after declining in earlier trading. The company’s stock has risen more than 20% since the start of the year.
Premium carmakers have proven more resilient in the face of slowing global demand, persistent inflation and higher raw-material costs. With supply chain bottlenecks easing, BMW, Mercedes, Volkswagen and others still have significant order backlogs to work down.
“We continue to benefit from stable pricing in new and pre-owned car markets,” BMW Chief Financial Officer Nicolas Peter said, adding “After a good start to 2023, as forecast, we expect the full year to progress in line with our outlook.”
Group earnings before interest and tax rose 58.5% to €5.38 billion compared to the first three months of 2022.
Yet, Peter cautioned that the global economic and political outlook remains uncertain and tense. That view has echoed across the industry in recently by competitors including Volkswagen, Mercedes-Benz, Stellantis and Ford. And as production normalizes and more cars come to market, auto makers are facing the prospect that downward price pressures could increase. Tesla Inc. has added to tension with drastic price cuts this year.
BMW has shifted resources toward the development and marketing of its most expensive models to help finance the shift to electric vehicles. The automaker sold almost a fifth more of its high-performance M-badged cars, while sales of its compact Mini brand vehicles declined. Its ultra-luxury Rolls Royce cars also saw an increase in orders.
At the same time, demand could falter further if the global economy continues to weaken. BMW’s Chief Executive Officer Oliver Zipse has said he expects global markets to slightly cool and that growing sales of the company’s most expensive models will offset increases in the costs of materials and logistics.
For more stories like this, bookmark www.NADAheadlines.org as a favorite in the browser of your choice and subscribe to our newsletter here:
