View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. News
March 16, 2022

BMW lowers 2022 profit margin forecast due to Ukraine disruption

The effects of war in Ukraine are forecast to negatively impact BMW production in 2022, with profit margin dented.

By David Leggett

BMW has lowered its profit margin guidance for 2022 on the back of the negative impacts that the war in Ukraine is having on production.

Free Report
img

Spot leading innovative companies with GlobalData’s Innovation Scorecard

Innovation remains a necessity in a disruptive ecosystem, as continuous innovation allows companies to adapt, evolve, and grow through disruption. Using our in-house alternative datasets, we are excited to launch GlobalData’s Innovation Scorecard. This scorecard will allow clients to rank 3,500+ companies on their innovation activity, impact, and disruptive potential across geography, sector, and theme. The scorecard provides a data-driven framework to rank leading companies on the potential of their intellectual property (IP) portfolio. GlobalData’s Innovation Scorecard focuses not only on the activity of innovation in the organization but also on its impact and disruptive potential using the 3I framework: Intensity, Impact, and Ingenuity. The tool helps clients to identify the most innovative companies that are disruptive leaders and challengers and can create alpha for their portfolio using the insights driven by 19+ high-value KPIs. Download our report to find out more about this innovative tool. Key findings derived from this tool include:
  • Alphabet, Tencent, and Qualcomm are the top three innovative companies in the last 10 years
  • The scorecard finds Technology & Communications and Pharma & Healthcare as the two main sectors driving innovation
  • Loreal placed as ‘Disruptive Leader’ in the Consumer sector, while Revlon has been identified as a traditional laggard
  • Companies such as Etsy and H&M are challenging retail ‘Disruptive Leaders’ Amazon and Walmart
by GlobalData
Enter your details here to receive your free Report.

BMW said that without war in Ukraine, the BMW Group would have targeted a range of 8-10% for EBIT margin in 2022. However, it now says that ‘taking into account the negative effects of adjustments to production, the EBIT margin is now forecast to be between 7-9%.’

The company reported a record profit for 2021 and Automotive Segment EBIT margin of 10.3% (at the high-end of its guidance).

BMW said its latest guidance assumes that the impact of the geopolitical situation in eastern Europe will lead to restrictions in the BMW Group production network ‘over the coming weeks’.

The company is also ‘engaging in intense and constructive discussions with its partners and suppliers and leveraging the high level of flexibility in its production network to minimise these limitations’. This, it said, also involves these suppliers’ production locations worldwide.

However, BMW also said it continues to source parts from western Ukraine, thereby securing long-term prospects for those employees. However, the safety of local employees remains the top priority throughout all these activities, the company added.

“In the current situation, three things are paramount for the BMW Group: helping the victims and those affected wherever we can, securing our day-to-day operations worldwide and continuing to systematically implement our long-term strategy,” said BMW CEO Oliver Zipse. “The major challenges we are already facing, such as the fight against climate change and the transformation towards sustainable mobility, must still be confronted with the same intensity. It is especially important in times of crisis not to stop doing the right things.”

BMW also noted that international demand for semiconductors is likely to remain high this year, with a correspondingly difficult supply situation. ‘As in 2021, there is still a risk of supply bottlenecks for the semiconductor components required for in-house production. The situation is not currently expected to improve until the second half of 2022.’

Although BMW Group reported 2021 car sales up 8.4% to 2.52 million units, there was a significant downturn in the fourth quarter of the year. BMW car sales in Q4 were down by 14.2% on the previous year at 589,300 units.

Free Report
img

Spot leading innovative companies with GlobalData’s Innovation Scorecard

Innovation remains a necessity in a disruptive ecosystem, as continuous innovation allows companies to adapt, evolve, and grow through disruption. Using our in-house alternative datasets, we are excited to launch GlobalData’s Innovation Scorecard. This scorecard will allow clients to rank 3,500+ companies on their innovation activity, impact, and disruptive potential across geography, sector, and theme. The scorecard provides a data-driven framework to rank leading companies on the potential of their intellectual property (IP) portfolio. GlobalData’s Innovation Scorecard focuses not only on the activity of innovation in the organization but also on its impact and disruptive potential using the 3I framework: Intensity, Impact, and Ingenuity. The tool helps clients to identify the most innovative companies that are disruptive leaders and challengers and can create alpha for their portfolio using the insights driven by 19+ high-value KPIs. Download our report to find out more about this innovative tool. Key findings derived from this tool include:
  • Alphabet, Tencent, and Qualcomm are the top three innovative companies in the last 10 years
  • The scorecard finds Technology & Communications and Pharma & Healthcare as the two main sectors driving innovation
  • Loreal placed as ‘Disruptive Leader’ in the Consumer sector, while Revlon has been identified as a traditional laggard
  • Companies such as Etsy and H&M are challenging retail ‘Disruptive Leaders’ Amazon and Walmart
by GlobalData
Enter your details here to receive your free Report.

NEWSLETTER Sign up Tick the boxes of the newsletters you would like to receive. The top stories of the day delivered to you every weekday. A weekly roundup of the latest news and analysis, sent every Monday. The industry's most comprehensive news and information delivered every quarter.
I consent to GlobalData UK Limited collecting my details provided via this form in accordance with the Privacy Policy
SUBSCRIBED

THANK YOU

Thank you for subscribing to Just Auto