BMW suffers reverse amid supply chain bottlenecks

BMW has warned that car deliveries will be lower this year than last as a shortage of microchips, coronavirus lockdowns in China and disruption from the war in Ukraine hammer the industry.

The German carmaker cut its delivery outlook and said business conditions are likely to “remain difficult” during the second half of the year, blaming the war in Ukraine and supply chain disruptions.

Oliver Zipse, its chief executive, said: “We see an increasing economic headwind coming up in addition to the ongoing supply shortages.”

BMW’S net profit fell to €3bn during the second quarter amid supply bottlenecks and delays caused by lockdowns in China. It shipped just over 563,000 units between April and June, down 19.8pc from the same period in 2021.

“The ongoing supply bottlenecks, particularly for semiconductors, the war in Ukraine and interruptions in supply chains have led to a decline in deliveries in the automotive segment in the first half of the year,” said BMW.

The company said some of the shortfall in sales was being offset by price increases.

With production limited, the carmaker has focused its resources on higher-end vehicles, which have better profit margins.

The Munich-based company said this “high-quality product mix” was helping to stem falling profits.

Mr Zipse said the company had shown “a high degree of resilience” despite “unfavourable conditions”.

BMW forecast sales would be “solidly higher” during the second half of this year, but h cautioned that this would not offset the sales volume that was lost during the first six months.

“As a consequence, deliveries for the year are expected to be slightly below previous year,” the company said.

It said the percentage of electrified vehicles sold would “increase significantly” over the year, reaching “more than double” last year’s total.

The update did not account for the potential impact of new sanctions related to the invasion of Ukraine, amid worries that Vladimir Putin may cut off gas supplies to Europe this winter.