German automaker BMW said Thursday that strong demand for its premium brands enabled it to lift profits in the first quarter even though supply chain bottlenecks and pandemic lockdowns weighed on sales.
BMW said in a statement that its bottom-line net profit soared by 260 percent to 10.2 billion euros ($10.8 billion) in the period from January to March.
The rise was attributable to the consolidation of BMW’s Chinese joint venture, BMW Brilliance Automotive, the carmaker said.
Stripping out that effect, underlying earnings — as measured by operating profit — were also higher, rising by 12.1 percent to 3.4 billion euros in the January-March period.
“The BMW group further strengthened its competitive position as well as its profitability in the first quarter of 2022, thanks to sustained demand for its premium vehicles,” the statement said.
“However, despite full order books, global supply bottlenecks for components meant that customer demand could not be met in full,” BMW said.
“The situation was also exacerbated by the spread of coronavirus, to which China in particular reacted with the introduction of stringent countermeasures and a renewed lockdown.”
In all, BMW sold nearly 597,000 cars during the three-month period, 6.2 percent fewer than a year earlier.
On the back of the strong first quarter, BMW said it would maintain its guidance for the year, aiming for an operating margin of between seven and nine percent and steady unit sales, despite “high volatility” linked to the Russian invasion of Ukraine, which has sent the price of energy and raw materials soaring.
BMW said it expected the market for such commodities to “remain tense” and warned that the risk of shortages in semiconductors would persist.
Bottlenecks in the supply of such components, which are used in both conventional and electric vehicles, have plagued auto manufacturers and stalled production throughout 2021.