(Bloomberg) — BMW AG cut its delivery outlook due to ongoing supply-chain snarls and cautioned that demand is showing signs of retreating from above-average levels as inflation and higher interest rates hit consumers.
The carmaker sees vehicle orders normalizing toward the end of the year, particularly in Europe, it said Wednesday, as pent-up demand from the ongoing semiconductor shortage levels off. BMW kept unchanged a forecast on automaking returns at between 7% to 9%.
The shares slumped as much as 5.6% in early Frankfurt trading, the most since March 10.
BMW is the first carmaker “to signal caution on the demand,” Bernstein analyst Daniel Roeska said an a note. “This implies weakening sentiment today, even as production ramps up across the sector.”
So far, demand for cars has remained high even as the global economic outlook worsens and record inflation hits consumers’ pockets. Manufacturers including Mercedes-Benz AG have raised their outlooks for the year while warning that economic risks are building.
“We see an increasing economic headwind coming up in addition to the ongoing supply shortages,” BMW Chief Executive Officer Oliver Zipse said in a statement.
BMW sees strong vehicle pricing and a strong lineup offsetting lower deliveries this year, it said.
Second-quarter group earnings before interest and tax declined to 3.43 billion euros ($3.5 billion), compared with an average analysts’ estimate of 3.2 billion euros, according to data compiled by Bloomberg.
(Updates with shares in third, analyst comment in fourth paragraph)
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