Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

BMW says costs, low used car prices to weigh on 2024 pre-tax profit

Published 2024-05-08, 01:39 a/m
© Reuters. FILE PHOTO: Visitors look at the BMW XM hybrid electric vehicle at the Beijing International Automotive Exhibition, or Auto China 2024, in Beijing, China, April 25, 2024. REUTERS/Tingshu Wang/File Photo
TSLA
-
P911_p
-

By Andrey Sychev and Nick Carey

BERLIN (Reuters) -BMW said on Wednesday it expects a slight drop in pre-tax profit this year due to higher research and development, manufacturing and personnel costs, with a decrease in used car prices also contributing to the decline.

The Munich-based automaker reported a fall in its first-quarter profit margin in its automotive segment as persistently higher costs weighed on its bottom line and demand for luxury cars in China remained muted.

The German premium automaker's pre-tax margin in the car segment fell to 8.8% from 12.1% a year earlier and below the 9.2% expected by analysts in a company-compiled consensus.

First-quarter revenue dropped slightly despite a 1.1% increase in car sales.

During the pandemic supply chain shortages meant automakers were able to charge higher prices for their vehicles and were able to sell cars coming off lease for more because of strong demand for used cars.

BMW is investing heavily in electric vehicles and model revamps across its line-up and expects record spending this year, up from 7.5 billion euros last year.

"This year, it will be more important than ever to maintain our strategic course," Chief Financial Officer Walter Mertl said in a statement. "The investments needed in the digital and electric future of our company are the highest they have ever been."

BMW rivals Mercedes Benz and Porsche (ETR:P911_p) are also spending heavily as Germany's automakers try to tackle growing competition in the EV market from China and Tesla (NASDAQ:TSLA).

First-quarter group pre-tax profit fell 18.9% to 4.1 billion euros ($4.40 billion) but beat the 3.9 billion expected by analysts.

© Reuters. FILE PHOTO: Visitors look at the BMW XM hybrid electric vehicle at the Beijing International Automotive Exhibition, or Auto China 2024, in Beijing, China, April 25, 2024. REUTERS/Tingshu Wang/File Photo

Sales of fully electric cars rose 28% to 83,000 vehicles in the quarter.

($1 = 0.9313 euros)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.