(Bloomberg) — BMW AG upped its profit expectations for this year after higher car prices outweighed a worsening semiconductor shortage that’s hampering output across global automakers.
The German luxury carmaker sees earnings before interest and taxes on automaking of between 9.5% and 10.5% on sales, up from a previous view of 7% to 9%, BMW said Thursday.
“Whilst the semiconductor supply restrictions are expected to further impact production and deliveries, the continuing positive pricing effects for both new and pre-owned vehicles will overcompensate these negative sales volume effects,” the Munich-based company said.
BMW’s earnings before tax are still expected to rise “significantly,” it said, adding free cash flow is seen at around 6.5 billion euros ($7.5 billion).
BMW’s new guidance comes despite intensifying headwinds facing the world’s automakers as they fight the global chip crisis. Forecaster IHS Markit in mid-September made the biggest adjustment yet to its auto-production projections, which have been falling all year due to the global chip shortage. Consultancy AlixPartners has said the hit to global automaking revenues could reach $210 billion.
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