BMW confirms 2021 outlook, but warns of volatility ahead

BMW reiterated its full-year profit margin outlook but said that it expected the rest of the year to remain volatile and that rising raw material costs could hurt earnings moving forward.

Pretax margin for its main carmaking operations probably will come in at the upper end of its previous forecast of between 6 percent and 8 percent, the company said in a statement on Friday.

Automotive margin rose to 9.8 percent in the first quarter.

BMW in April reported a 370 percent jump in pre-tax profit for the quarter as it bounced back more strongly than expected from a pandemic-ravaged first quarter last year.

Vehicle sales during the quarter surged more than a third to almost 637,000 cars as deliveries in China almost doubled. Quarterly results also received a boost from the sale of previously leased vehicles, in particular in the U.S. market. Vehicle sales in North America rose 17 percent.

Sales of its electrified vehicle models more than doubled in the quarter, when the company also benefited from higher sales of its lucrative X5 and X6 SUVs.

BMW said that it expects to have 2 million full-electric cars on the road by 2025.

BMW has largely avoided the semiconductor chip shortage. The automaker is known for its strong relations with suppliers and has been working with them to avoid disruptions.

The company paused production of Mini cars at its factory in Oxford, England, due to a shortage of chips and reduced shifts at its plant in Regensburg, Germany.

Most of the auto industry has been hit by a global semiconductor chip shortage, shuttering many assembly plants, driving down inventories and pushing up prices for both new and used vehicles.

Volkswagen Group CEO Herbert Diess said on Thursday that the automaker was in "crisis mode" over the chip shortage, which would hit profits in the second quarter, while Ford Motor last week said the lack of chips could halve its second-quarter vehicle production.

Bloomberg contributed to this report