Despite recessionary trends in many markets, the BMW Group expects stable development for the automotive sector globally in 2023. But in Europe – even if a slight growth in total sales is expected thanks to the order book – high inflation and rates of interest are creating an uncertainty that will continue to weigh on consumers.
BMW’s vision relating to the United States and China is more reassuring. In the first market, the solid sales situation should continue throughout the year. And in China, now that the pandemic has subsided, the economy and the automotive market are expected to stabilize over the course of the year.
Buoyed by strong global demand for its premium models, the BMW Group therefore confirms a forecast of slight growth in its deliveries worldwide in 2023.
The stable price situation in the new and used car markets – from which BMW has benefited – is expected to normalize over the course of the year and more resilient sourcing should improve vehicle availability, possibly leading to more intense competition.
In addition to the burden on consumers in many markets of high inflation and interest rates, the Munich Group also expects that production costs will remain at a high level, due to continued increases in metal prices and in particular raw materials for batteries.
Further adverse costs could come from supply chains and logistics, as well as continued high energy prices. Due to inflation, higher external personnel and service costs should be expected later in the year. Taking into account the above developments, the BMW Group therefore expects an EBIT margin in the automotive segment of between 8 and 10% for the full year 2023. This still includes the negative effects of 1.5 billion from consolidations impacting on the Ebit margin for about 1%.
In the first quarter, the company’s operating performance was confirmed by the Group’s EBIT margin reaching 13.9%, while the EBIT margin for the Automotive segment had risen to 12.1%.
Source: Ansa
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