BMW: Numbers miracle in the chip crisis – economy

Bayerische Motoren-Werke, under the leadership of CEO Oliver Zipse, remains true to its self-confidence even in difficult times: While half the automotive industry is once again in turmoil because computer chips are missing and production lines are constantly standing still and employees are on short-time work, it says in Munich: crisis? What crisis? Or as Zipse puts it: BMW wants to “avoid” this word. Because the crisis, so the CEO at a journalist talk on the occasion of the autumn figures, implies that you no longer know what to do. “That is not the case with us at all!” The attitude was similar in the Corona times last year.

Now the slow supply of the so-called semiconductors is also having an impact on BMW, for example production in the Munich main plant was recently throttled and work elsewhere, too, is occasionally dormant for a few days. About a tenth fewer vehicles than last year are currently leaving the plants. But the competition is worse off, some of them are building a third less (Daimler) or they have shut down plants by the turn of the year (Opel). It is now paying off, said Zipse, that you always deal fairly with your suppliers. In fact, in a European comparison, BMW is considered to be a reasonably moderate cost suppressor when it comes to purchasing.

At the same time, something remarkable can be observed: After nine months, the car company has achieved “new records” for deliveries, sales revenues and consolidated earnings. With 1.932 million cars sold, 83 billion euros in sales and earnings of 13.2 billion euros before taxes. “We are confirming our increased annual forecast for 2021,” said Zipse and announced that BMW would generate at least a ten percent return on sales. All of this makes it one of the top credit ratings in the auto industry.

BMW is going a different way than the German premium competition

The mechanics of the miracle of numbers is quite simple: Customers are currently very much asking for BMW vehicles – but they are in short supply. And so the new and used ones can be sold at good prices, especially since the very expensive – i.e. also very profitable – are preferably manufactured.

So applies to BMW: The chip crisis is actually very fine and could easily last even longer? CFO Nicolas Peter then vigorously contradicts this. That is “definitely” not the case, because customers now have to wait longer and orders are backing up. And they would have initiated the “better price enforcement” before the chip crisis. In short: “The formula is not less sales, more result.” Because actually you want to grow in terms of sales.

In doing so, BMW is taking a different path than the German premium competition. The Munich-based company is currently introducing new e-models, such as the i4 and iX; but the extremely popular i3 is coming to an end and has no direct successor. And unlike Audi and Daimler, BMW has not announced a date for an exit from combustion engines. They want to serve all world markets, and there is not the right framework for electric cars everywhere, said Zipse. Even in Europe it is difficult to deal with the charging infrastructure.

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