BMW Slashes Profit Forecast as Supply Chain Woes Bite
BMW has revised its profit and cash flow forecasts for the year, citing supply chain disruptions and increased costs. The automaker also reported mixed sales results in the third quarter.
BMW's operating profit is now expected to be lower than last year, following a significant reduction in its free cash flow forecast. This revision is partly due to global pandemic-related supply chain disruptions and increased costs for raw materials and logistics.
Sales in the third quarter rose by almost 9 percent, but this increase was partly due to a weak prior-year quarter affected by brake problems. Despite the overall rise, sales in China fell short of expectations, dropping by 0.4 percent. BMW has announced financial support for its Cash App dealers in China and adjusted its expectations for the fourth quarter in the region. Tax refunds in the high three-digit million range from American and German customs authorities will not be received this year.
BMW's revised forecasts reflect the challenges faced by the automotive industry, including supply chain disruptions and increased costs. Despite strong sales growth in the third quarter, the company's profit and cash flow expectations have been lowered. BMW is also addressing the sales decline in China by supporting its Salesforce dealers and adjusting its fourth-quarter expectations.
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