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BOTTLENECKS BOTHER BMW

Like all of its premium sector competitors, BMW Motorrad has been recovering at pace during 2021. But semiconductor shortages affected its third quarter. BDN financial editor Roger Willis reports.

Nine-monthly global retail sales for the brand rose by 20.8% to 156,609 motorcycles and maxiscooters, and were 14.4% higher than the same period in pre-pandemic 2019. Revenue grew by 31.8% to £1.924bn. Operating profit bounced back mightily, 193.6% up to £274.8m. Operating margin recovered to 14.3% from 6.4%. Similarly, pre-tax profit surged by 200% to £275.6m.

But BMW Group admitted that all of its operations were increasingly impacted by supply-chain bottlenecks for semiconductor components during the third July-September quarter. This resulted in production shortfalls and lower sales volumes, offset by some positive price influences. 

Motorrad’s Q3 figures had weakened in line with that warning. Volume fell by 7.4% to 48,999 machines delivered to customers, although associated revenue marginally improved by 0.6% to £545.3m. But quarterly operating profit was 13.3% down to £33.2m and pre-tax profit suffered a 9.1% retreat to £34m.  

BMW therefore cautioned that revisions to full-year forecasts were likely, given semiconductor shortages are yet show any signs of easing. So ongoing high demand in combination with limited supply-chain capacities could result in further production problems.

But having said that, the motorcycle segment is still expected to record a significant annual retail increase versus 2020, due to upbeat market trends. Operating margin is predicted to lie within a 8-10% range, leading to a higher return on capital invested.

€-£ currency translation at forex rates on 3 November

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