(Reuters) – BMW expects its fourth-quarter pre-tax earnings to be significantly below last year and its full-year margin to be in the lower half of its 6-7% target, according to slides posted on the carmaker’s website on Tuesday.
Inflation and higher fixed costs from unwinding inventory hit its earnings in the last three months, according to the slides published on its website, leading to a year-on-year margin decline.
The slides were presented during a call with investors that was not open to the press during a closed period on company information ahead of its annual results, which will be released on March 14.
The premium carmaker said it does not see a return to its previous profitability target of 8-10% this year due to high raw material costs, new model rollouts and persistent weak demand in China, according to a Bernstein note to clients published after the call.
This aligns with the current consensus estimate, the note added.
The group is close to fully resolving a brake issue that has affected more than 1.5 million cars worldwide, hitting full-year earnings, the note said. The issue will not affect them in 2025, it added.
BMW’s CEO Oliver Zipse said on Tuesday at a conference in Berlin that the company will propose this week that the European Union lower its tariff on U.S. car imports to 2.5% from 10%, in line with the current U.S. import tariff.
The German automaker cut its outlook for the year to 6-7% from 8-10% in September and reported a 61% drop in third-quarter profit, missing analyst expectations, because of slumping China sales and brake problems.
(Reporting by Victoria Waldersee and Andrey Sychev; Editing by Miranda Murray and Jan Harvey)
