As the rest of the world grapples with a narrowing economy, BMW India is wallowing in money, having posted increased profits for the first quarter of the year ended 31st March 2022. Four-wheeler sales profits jumped by over 25% while two-wheelers recorded a 41% advancement in gains in the same period. During a celebration of this milestone, the luxury automotive group announced that it expects 2022 to be a “mega year” for the company. This comes even as all car manufacturers are confronting a major shortage of semi-conductors and encountering the effects of the Ukraine-Russia conflict and COVID 19 in China.
One of the main projects of the car manufacturer in this “mega year” is to launch 24 new products in the categories of four-wheelers and motorcycles, including a full-electric sedan. In precise, BMW clocked sales of 2,636 car units of sedans and SUVs and an additional 179 units of luxury cars, the pocket option experts reported.
The situation seems to be different from some of BMW’s competitors. Tata-Motors-owned car maker, Jaguar Land Rover (JLR) published a declining sales figure in the first quarter of 2022. Reports indicate that JLR earnings for the financial period January to March 2022 slipped sharply by 14%. This was after the firm filed a 36% plunge in 2021 earnings at the end of the last fiscal year. The company blames these losses on the deficit of semi-conductor, even though BMW appears to be doing pretty fine in the same environment.
The president of BMW Group India while elaborating on the hurdles said, “The semiconductor shortage that we had is yet to be overcome fully. There are some additional challenges that are coming through now because of the geopolitical situation in Ukraine or the shutdowns because of COVID-19 in China right now.”
Also, he added, “Logistical challenges are happening across the world due to lack of availability of ships and air freights.”
BMW India continues to experience strong demand defying the effects of increased car prices due to shortages of semi-conductors and is likely to set a new high by the end of the next quarter. The president did not deny that they are also experiencing supply issues. “The supply is currently a little restricted. We could have sold much, much more because we are holding roughly around 2,500 orders for four-wheelers and over 1,500 orders for motorcycles. Literally, you can say it could have been doubled,”
BMW Group India President is optimistic that even with rising fuel prices, the kind of premium customers they have will continue to place orders. He however indicated that they are starting to see a shift to electric vehicles.
“When we launched the iX in December it was all pre-sold already. The delivery for that will start from this month onwards,” he said, adding that the latest MINI electric vehicle that was launched two months ago received a 100% sale within the same month. He further said,”(Despite the challenges) we have seen growth in the first quarter of 25 percent in four-wheelers and 41 percent in two-wheelers. I expect that kind of growth in any case.”
It could indeed be an explosive year for the automotive industry as the economy rekindles after two years of the Covid 19 pandemic. Individual company positioning, ability to handle semi-conductor supply issues, and type of customers a company attracts will play the most important role in determining how well or how bad different car companies will perform this year. For BMW India, the road to the sky is already set.
