Equities
BMW's earnings fall due to higher costs, with a margin drop to 8.8%, despite a 28% surge in electric vehicle sales.
By Athena Xu
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BMW AG reported a decrease in earnings for the first quarter as increased manufacturing costs impacted the luxury car maker's profitability. The automaker's margin fell to 8.8%, aligning with its target range but slightly below the expectations of analysts. Despite this, BMW reaffirmed its full-year guidance. The company's shares experienced a 4% drop in early trading in Frankfurt, contributing to an 8% decline over the past year. This performance reflects broader challenges in the car market, including persistent inflation, a slow recovery in China, and subdued economic growth across Europe. Competitors like Mercedes-Benz Group AG and Volkswagen AG have also reported difficulties at the start of the year, highlighting a potentially tough year ahead for the industry.
In contrast to the overall downturn, BMW saw a notable increase in deliveries of its high-end models, such as the BMW 7-Series sedan, during the first quarter. This positive development suggests a sustained demand for luxury vehicles despite broader market challenges. Additionally, BMW outpaced its German luxury rivals, Mercedes and Audi, in the transition to electric vehicles (EVs). Sales of BMW's fully electric vehicles, including the i4 sedan and the iX1 sport utility vehicle, surged by 28%, indicating robust demand for battery-powered models.
The main BMW brand experienced mixed results across key markets, with sales climbing 10% in Europe but falling 4.1% in China. The decline in the Chinese market was attributed to lower volumes in the premium segment, underscoring the uneven recovery across different regions. Despite these fluctuations, BMW's overall revenue remained roughly flat at €36.6 billion. However, the group's earnings before interest and taxes saw a significant reduction, falling by a quarter compared to the previous period.
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