BMW Group expects a stable margin this year in its key automotive division, but anticipates a lower overall EBIT margin as demand for used cars falls and investments peak. The German luxury car manufacturer announced that its automotive division – comprising BMW, Mini, and Rolls-Royce – will experience a slight increase in demand this year as new models are launched. However, write-downs related to the Chinese joint venture Brilliance Automotive will dampen profits.
As a result, BMW expects the EBIT margin of its key division to be between 8% and 10% for 2024, which corresponds to last year's results of 9.8%. The company's overall EBIT margin is expected to be between 8% and 10%, compared to 11% in the previous year. Total EBIT will drop slightly this year from €18.48 billion ($20.18 billion) as the financial services segment struggles with lower demand in the used car market, which will decrease leasing revenues. Investments in electrification and digitization will also weigh on the results but are expected to peak this year.
The Company Expects a Free Cash Flow of Over 6 Billion Euros for its Automotive Division, Compared to 6.94 Billion Euros Last Year. However, BMW Expressed a Limitation of Expectations as the EU Investigates Chinese Subsidies for Carmakers, Which Could Lead to Tariffs and Trade Wars. "Growing Uncertainties Regarding Macroeconomic and Geopolitical Conditions Could Cause the Economic Performance in Some Regions to Diverge from Expected Trends and Developments," Said BMW. This Affects Trade and Customs Policy, Security Policy, and a Possible Intensification of International Trade Disputes. As a Group, Fully Electric Vehicles Will Account for a Larger Share of BMW's Revenue This Year, According to the Company.
