BERLIN (Reuters) – BMW reported on Thursday an earnings margin of 12.1% in the first quarter of 2023 for its cars segment, up from 8.9% a year earlier, confirming its outlook for 2023 but warning of ongoing high costs and rising competition particularly in China.
The carmaker attributed a drop in group earnings before tax – to 5.1 billion euros ($5.65 billion) from 12.2 billion last year – to the one-time effects from the full consolidation of its Chinese joint venture, BMW Brilliance Automotive, last year.
“The geopolitical and macroeconomic situation remains unpredictable and tense. Inflation and interest rates in key markets are high. The same applies to material and commodity prices,” Chief Financial Officer Nicolas Peter said.
Sales were down 1.9% in Europe and 6.6% in China, attributed to inflation and the after-effects of the coronavirus pandemic – but an upward trend was visible in March and April, the statement said.
The carmaker continues to expect slight growth in Europe, robust sales in the United States, and a stabilising economy in China.
BMW’s financing and leasing business suffered in line with that of other carmakers like Porsche under persistently high interest rates and price Increases, with the volume of new business dropping 14% and earnings down 6.2%.
(Reporting by Victoria Waldersee; Editing by Maria Sheahan)
