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BMW buyers kept waiting amid high demand

BMW customers are waiting for around three months for their new car, as the Bavarian firm struggles to keep up with demand.

BMW buyers kept waiting amid high demand
Photo: DPA

Presenting the firm’s half-year results on Tuesday, CEO Norbert Reithofer said production capacity had created a bottleneck, and was operating at 102 percent, according to Wednesday report by the Financial Times Deutschland business daily.

“We could have sold more cars,” he said, and announced that factories would be expanded and a new one built. The board will decided in autumn about whether to build an assembly facility in Brazil.

Overall, the BMW group – BMW, Mini and Rolls Royce – sold 833,366 cars in the first half of the year, nearly 20 percent more than the figure for the same period last year.

The last six months were the best in the company’s history in terms of sales, turnover and profit, BMW said, overtaking the healthy results recently posted by Daimler and Audi.

Yet the waiting times customers are currently having to swallow are not acceptable, said Reithofer. Particularly popular models such as the X3 are taking more than three months to reach their new owners.

“From our viewpoint, these delivery times are too long,” said Reithofer.

The fear is that although European customers may be willing to wait for their cars, those in the United States could decided for another manufacturer which can deliver immediately, the FTD said.

Only last year, BMW increased its production capacity in its American factory Spartanburg to reach 240,000, while this year production should reach 270,000. “The next step will take us towards 300,000,” said Reithofer.

Turnover increased during the first half of this year by 22 percent over the same period last year, to €33.93 billion, with profits rising over the same period by two percent to 13.9 percent.

Yet Reithofer said the company should not be complacent. “The global risks for a further boom are generally increasing rather than decreasing,” he said, suggesting factors such as the heavy debts of some states and political instability could be problematic.

BMW’s greatest increase in sales was recorded in Asia, where the first half of this year saw an increase of 47 percent over the same period last year. China accounted for nearly two thirds of these sales.

BMW lags behind Audi in this market though, the FTD said. A new BMW factory will start production next year in Tiexi, Shenyang Province, which will enable the group to produce a total of 300,000 units a year in China in the mid term.

The Local/hc

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ECONOMY

Swedish economy to grind to a halt as interest rates kick in

Sweden faces an economic slump next year that will see economic growth grind to a complete stop, Sweden's official government economics forecaster, has warned.

Swedish economy to grind to a halt as interest rates kick in

Sweden’s National Institute of Economic Research, which is tasked with tracking the business cycle for the Swedish government, warned in its quarterly forecast on Wednesday that greater than expected energy prices, interest rate rises, and stubborn inflation rates, Sweden was facing a significant downturn. 

The institute has shaved 1.6 percentage points off its forecast for growth in 2023, leaving the economy at a standstill, contracting -0.1 percent over the year. 

The institute now expects unemployment of 7.7 percent in 2023, up from a forecast of 7.5 percent given when in its last forecast in June.

“We can see that households are already starting to reign in their consumption,” said Ylva Hedén Westerdahl, the institute’s head of forecasting, saying this was happening “a little earlier than we had thought”. 

“We thought this would have happened when electricity bills went up, and interest rates went up a little more,” she continued. 

The bank expects household consumption to contract in 2023, something that she said was “quite unusual” and had not happened since Sweden’s 1990s economic crisis, apart from in the immediate aftermath of the Covid-19 pandemic. 

This was partly down to a five percent reduction in real salaries in Sweden in 2022, taking into account inflation, which the institute expects to be followed by a further two percent fall in real salaries in 2023. 

If the incoming Moderate-led government goes ahead with plans to reimburse consumers for high power prices, however, this would counterbalance the impact of inflation, leaving Swedish households’ purchasing power unchanged. 

The institute said it expected inflation to average 7.7 percent this year and 4.6 percent in 2023, both higher than it had forecast earlier.

Sweden’s Riksbank central bank this month hike its key interest rate by a full percentage point, after inflation hit 9 percent in August, the biggest single hike since the 1990s. 

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