BMW, a German automaker, reported on Wednesday that supply constraints and Chinese government lockdowns reduced second-quarter profits.
The automaker’s profits during the months of April through June decreased from 4.8 billion euros in the same time last year to three billion euros ($3.1 billion).
Although he acknowledged “unfavorable conditions,” Oliver Zipse, CEO of BMW, stated in a statement that the Munich-based company has displayed “a high degree of resilience.”
“Ongoing semiconductor supply issues and supply chain disruptions following Covid lockdowns in China”, a key market for automakers, held back production in the first half of the year, BMW said in a statement.
In the second quarter of 2022, BMW shipped just over 563,000 vehicles, a decline of 19.8 percent.
Due to production restrictions, BMW, like other premium automakers, relied more on its higher-margin top-of-the-line models.
This improved “product mix” and higher car prices helped the company offset the decline in sales of its automobiles, according to BMW.
In addition to supply disruptions brought on by the conflict in Ukraine, BMW predicted that economic conditions would “remain tough” in the second half of the year.
Despite “not entirely compensating for lost volume” in the first half, unit sales in the second half would be “solidly higher,” according to BMW, indicating that deliveries of its vehicles would now be “slightly below” the level of the previous year.
Because to recent supply constraints and high demand, BMW has a “above-average order bank.”
High energy prices would cause high inflation, which would cool the economy and cause BMW’s order backlog to “normalize towards the end of the year.”
The effect that a reduction in Russian gas supplies to Europe could have on BMW’s domestic production was not considered in BMW’s projections.
