Despite the ongoing global pandemic, BMW Group is optimistic for the foreseeable future. According to a report by Handelsblatt, BMW Chief Financial Officer Nicolas Peter says that the 2021 global sales are expected to increase by 5 to 10 percent. Furthermore, BMW is targeting the upper end of this range.
The nearly 10 percent increase will bring BMW’s total sales at the 2019 levels, the highest sales ever achieved by the Bavarians. The message is clear though: despite the difficulties in the world and certainly in the automotive market, BMW is marching ahead and looking towards the future.
The optimism is based on the BMW sales figures of the first quarter of 2021, which are yet to be fully released. But we’ve already seen the U.S. market rebounding with an increase of 20.1 percent in Q1 2021 compared to the same period last year. The biggest growth driver is, unsurprisingly, Asia with the still booming Chinese market.
The shift towards electrification might come with a temporary decrease in profitability. Economies of scale certainly exist in an electrified world and big cost reductions are expected to be achieved at some point in the future. Handelsblatt says that when it comes to electric cars profitability BMW Group does not expect a return of 8 to 10 percent until 2030
For 2021, BMW said in a press release that “the EBIT margin in the Automotive Segment is expected to be within the range of 6 to 8%.” Furthermore, in the Automotive Segment, BMW is aiming for a Free Cash Flow of over 4 billion euros for 2021.
Whether the worst is behind us, remains to be seen, but one thing is certain: BMW is always focusing on long term plans.