BMW's quarterly margins squeezed by pricing, higher costs

BMW`s margins missed expectations in the fourth quarter as higher costs and falling prices for its products weighed on the auto maker’s profitability.

BMW on Thursday reported an automaking margin of 8.5 percent for the final three months of last year, slightly below analyst projections. Europe’s industrial companies have had to deal with persistently high energy costs.

While automakers long benefited from pent-up demand, orders are expected to normalize this year amid slowing demand for electric vehicles and sluggish economic growth in much of Europe.

Mercedes-Benz last month pared back its outlook for EV sales and is forecasting lower returns for 2024.

The automaker proposed a dividend of €6 ($6.57) per common share. That is below last year’s €8.50, when the payout was boosted by the full consolidation of its Chinese venture with Brilliance, the automaker said in a statement.

The automaker in January said demand for its gasoline-powered models has peaked, and that EVs will drive future growth.

BMW aims to sell half a million electric vehicles this year, roughly a fifth of total deliveries.

EV shipments jumped 75 percent last year, driven by models like the i4 sedan.

Group revenues climbed to around €43 billion in the fourth quarter, better than analysts had expected. 

Group revenue rose by 8.7 percent through October-December to 42.9 billion euros ($46.89 billion), while net profit added 20 percent and stood at 2.6 billion euros, both above the consensus.