Recovering demand in China looks good for BMW

Berlin — BMW expects to reach the higher end of its 7%-9% margin target for the cars business and sees slight sales growth in 2023, CFO Nicolas Peter said in a roundtable discussion on Monday.

Demand was recovering in China in the third quarter after lockdowns plagued the first half, the CFO said, describing it as a “rollercoaster” year in its largest sales market.

In Europe, order books are still full but demand is weak in Germany and the UK and stronger in France, Spain and Italy.

The luxury carmaker expects to hit its target of 10% fully electric sales this year at about 240,000-245,000 vehicles and could see that figure rising to about 400,000 next year, Peter added.

Asked how BMW is responding to the gas shortage in Europe, Peter said it has reduced gas intake in Germany and Austria by 15% and expects to be able to cut it further. “The gas issue will not have any direct impact on us this year,” Peter said, adding BMW has also not seen any production cuts in its supplier network so far.

Volkswagen and Mercedes-Benz have outlined contingency plans in the past week should their supplier networks fail to deliver parts, including increasing orders from suppliers outside the European countries most affected by the gas crisis.

Peter did not give specifics on whether BMW is doing the same but said it has developed a far closer relationship with its supplier network since the chip shortage.

Reuters