BERLIN (Reuters) – BMW said on Wednesday it expects a slight decline in pre-tax profit this year, due to higher costs for research and development, production and personnel, as well as lower sales. used car prices.
The German automaker reported a decline in its first-quarter profit margin in its automotive segment as persistently rising costs weighed on its results and demand for luxury cars in China remained subdued.
The group’s pre-tax margin fell to 8.8%, compared to 12.1% a year earlier, and below the 9.2% expected by analysts in a consensus provided by the group.
Revenue in the first quarter fell slightly, despite a 1.1% increase in car sales.
During the pandemic, shortages in the supply chain had allowed automakers to increase the prices of their vehicles.
BMW is investing heavily in electric vehicles and the modernization of its models and plans record spending in 2024.
“The investments required for the digital and electric future of our company have never been higher,” Group Chief Financial Officer Walter Mertl said in a statement.
The group’s pre-tax profit in the first quarter fell 18.9% to reach 4.1 billion euros, nevertheless exceeding the 3.9 billion expected by analysts.
Sales of fully electric cars increased 28% to 83,000 vehicles during the quarter.
(Reporting Christina Amman, Nick Carey and Andrey Sychev; Stéphanie Hamel, editing by Kate Entringer)
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