BMW has raised its 2021 profit forecast on Tuesday following strong quarterly results but said the continued chip shortage and increasing raw materials prices would damage its performance in the second half of the year.
The automaker has been less affected by the chip shortage compared to some of its rivals.
“In light of a number of prevailing risks, including raw materials prices and a shortage of semiconductors, the second six-month period is likely to be more volatile for the BMW Group,” BMW CEO Oliver Zipse said.
The chip shortage, which has hit automakers worldwide, emerges from a confluence of factors as automakers, which closed plants for two months during the coronavirus pandemic last year, rival against the sprawling consumer electronics industry for chip supplies. A factory fire suffered by Japanese chipmaker Renesas this year is also cited as a reason behind the chip shortage.
Chief Financial Officer Nicolas Peter said the automaker was able to offset the challenges of the chip shortage through “sheer hard work” but said that “the longer the supply bottlenecks last, the more tense the situation is likely to become”.
BMW reported a better-than-expected second-quarter profit following a loss a year ago when the automaker was affected by the coronavirus crisis.
BMW’s sales increased almost 45% while increasing nearly 75% in Europe and 88% in the United States.
Sales in China, which drove the automaker back to profitability in the second half of 2020 after coronavirus-related production shutdowns, were increased almost 12%.
The automaker reported a quarterly net profit of 4.8 billion euros ($5.7 billion), more than double the 2.2 billion euro forecast by analysts, and rebounding from a 212 million euro loss a year ago.
The results also received a 1 billion increase after the automaker had to set aside less money than initially feared for expected European antitrust fines for alleged collusion with competitors.
The automaker said it now expects a full-year operating margin for the automotive sector at the upper end of its forecasted range of 7% to 9%.
