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BMW Sees Auto Margin at Low End of Guidance on Weak Sales
Wilfried Eckl-Dorna
2 min read

In This Article:

(Bloomberg) -- BMW AG said its 2024 automaking profit margin will be at the lower end of guidance after sales of its premium cars fell.

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The margin for earnings before interest and taxes will be in the bottom half of its forecast of 6% to 7%, the German manufacturer said in a presentation ahead of its annual results. BMW had already lowered its margin outlook last September as a recall for some 1.5 million cars ate into profits.

BMW shares fell as much as 2.8% in Frankfurt, and are down 17% in the past year.

German carmakers are struggling with weak demand in China, as consumers in the world’s largest auto market increasingly opt for local brands.

Car prices fell and demand slowed in the fourth quarter from a year earlier, BMW said. The company also contended with higher manufacturing costs in the last quarter.

Auto-making margins improved from the third quarter, when they slumped to a four-year low. A recall linked to a faulty braking system required a provision of almost €1 billion ($1 billion) and contributed to sales in China plummeting after a temporary delivery halt.

BMW, which also owns the Rolls-Royce and Mini brands, warned that its financial services arm saw additional provisions in the fourth quarter related to its Chinese finance business and the consumer landscape in the UK.

The company said its free cash flow in 2024 exceeded €4 billion, in line with previous guidance.

Despite a fall in overall car sales last year, electric vehicles have offered a bright spot for BMW compared to its rivals. BMW is preparing to present the first of its Neue Klasse line of plug-in cars, with production starting in late 2025.

(Adds share price in third, details on fourth quarter in fifth paragraph)

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