German automaker BMW reported Thursday a 23-percent increase in third-quarter profit thanks to robust demand for pricier luxury models, but it warned that soaring inflation could limit purchases from consumers.
The Munich-based group said it had booked a net profit of nearly 3.2 billion euros ($3.1 billion), up from 2.6 billion euros between July and September last year.
Car deliveries, however, were down nearly one percent over the period, as the industry continues to grapple with supply chain disruptions and Covid lockdowns in China.
BMW said “higher prices” for its premium vehicles had helped deliver a “solid” third quarter.
The group said it was on track to meet its full-year earnings targets. Although the overall sales volume was expected to be “slightly lower” than in 2021, sales of fully-electric vehicles should still double, it said.
“The market success of our fully-electric models, in particular, means we can look forward to the coming months with confidence,” CEO Oliver Zipse said in a statement.
With many countries bracing for a recession as Russia’s war in Ukraine sends energy prices higher and central banks raise interest rates to tame red-hot inflation, the group warned that customer demand would slow in the months ahead.
“High inflation rates and interest rate hikes are causing conditions for consumers to deteriorate, which will impact their purchasing behaviour in the coming months,” BMW said.
Meanwhile, the international car manufacturing group Stellantis, which owns the Jeep, Peugeot and Fiat brands among others, said that inflation had yet to impact its business.
“The dynamics are still positive,” the carmaker’s chief financial officer, Richard Palmer, said at a news conference.
“We’re not seeing in North America any clear indication of demand softening,” while in Europe there had been a slightly lower intake in orders but it is not a clear trend, he added.
An improvement in the supply of semiconductors, which had severely hampered Stellantis’s production, allowed it to increase shipments by 13 percent in the third quarter from the same period last year.
Sales rose by 29 in the quarter to 42.1 billion euros due the higher volumes, higher prices and positive currency effects.