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    BMW   DE0005190003

BMW AG

(BMW)
  Report
Delayed Xetra  -  11:35 2022-09-30 am EDT
69.99 EUR   +1.24%
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Carmakers start to see weaker demand amid inflation squeeze

08/03/2022 | 10:12am EDT
FILE PHOTO: BMW's i4 EV at its plant in Munich, Germany

BERLIN (Reuters) - Carmakers are reporting lower demand in Europe and North America amid what analysts say is growing evidence that consumers are balking at higher prices and keeping their cash for necessities.

Although some upmarket brands like Ferrari and Mercedes have raised sales forecasts due to continued high demand for top end models, the outlook for the bulk of the industry is bleaker.

Waiting times on new orders are becoming shorter as order books thin out. That's even with production slower than usual and deliveries well below last year, executives said.

"New incoming orders are falling," BMW chief executive Oliver Zipse said in an earnings call on Wednesday, pointing in particular to Europe.

Carmakers have until now protected margins by bumping up prices, but the steep rise in inflation in North America and Europe could make it more difficult to pass on rising costs.

"Demand is coming down," Volkswagen's chief financial officer Arno Antlitz said last week, though he said order books were still full for the coming months. "The warning signs are for Europe and North America, less for the Chinese region."

Inflation in Europe and the United States has soared in recent months with central banks warning a peak could be months away, sending consumer and business sentiment plummeting.

Data from online car dealerships and auction platforms showed a slowdown in demand since March this year, Philip Nothard, insights director for Europe at Cox Automotive, said.

"Consumers are currently very cautious," he said.

A survey by the Munich-based Ifo institute released on Wednesday showed German carmakers' order backlogs shrinking and price expectations on a downward spiral due to concerns about a gas shortage and continued weakness in the Chinese economy.

"The weight of buying a car on the household budget is something we will come up against," Stellantis chief executive Carlos Tavares said last month.

For now, the carmaker intended to carry on passing its own rising costs to consumers, but this could not last forever.

"There is a limit to price hikes," Tavares said.

In the United States, Ford was considering bringing back discounts and incentives which were scrapped last year amid supply chain concerns, Chief Financial Officer John Lawler said.

"That's a relief valve going forward," he said.

(Reporting by Victoria Waldersee, Gilles Gillaume, Giulio Piovaccari, Joe White; additional reporting by Maria Sheahan; Editing by Matt Scuffham and Elaine Hardcastle)

By Victoria Waldersee


© Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
BMW AG 1.24% 69.99 Delayed Quote.-20.91%
FERRARI N.V. -0.76% 185 Delayed Quote.-27.97%
MERCEDES-BENZ GROUP AG -0.15% 52.35 Delayed Quote.-22.55%
STELLANTIS N.V. 0.47% 12.272 Delayed Quote.-26.80%
STELLANTIS N.V. 0.49% 12.276 Real-time Quote.-26.39%
VOLKSWAGEN AG -1.60% 126.4 Delayed Quote.-28.78%
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Analyst Recommendations on BMW AG
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Financials
Sales 2022 133 B 131 B 131 B
Net income 2022 14 737 M 14 451 M 14 451 M
Net cash 2022 23 675 M 23 216 M 23 216 M
P/E ratio 2022 3,05x
Yield 2022 10,5%
Capitalization 45 587 M 44 702 M 44 702 M
EV / Sales 2022 0,16x
EV / Sales 2023 0,14x
Nbr of Employees 118 909
Free-Float 57,5%
Chart BMW AG
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Technical analysis trends BMW AG
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Income Statement Evolution
Consensus
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Buy
Mean consensus OUTPERFORM
Number of Analysts 24
Last Close Price 69,99 €
Average target price 103,86 €
Spread / Average Target 48,4%
EPS Revisions
Managers and Directors
Oliver Zipse Senior VP-Corporate Planning & Product Strategy
Nicolas Peter Group Leader-Corporate Finance
Norbert Reithofer Chairman-Supervisory Board
Susanne Klatten Independent Member-Supervisory Board
Manfred Schoch Chairman-General Works Council
Sector and Competitors
1st jan.Capi. (M$)
BMW AG-20.91%44 702
TOYOTA MOTOR CORPORATION-6.98%185 505
VOLKSWAGEN AG-28.78%76 227
MERCEDES-BENZ GROUP AG-22.55%54 788
GENERAL MOTORS COMPANY-43.27%48 495
FORD MOTOR COMPANY-44.78%46 112