BMW 'on right track' chairman says as profit warning hits shares

BMW's supervisory board chairman Nicolas Peter expressed optimism about the company's next-generation models, citing strong orders for its Neue Klasse models despite a recent profit warning.

BMW is "on the right ​track" with its next-generation models, supervisory board ​chairman Nicolas Peter said on Thursday, days ‌after ​a shock profit warning which has hit the group's shares. Orders for BMW's Neue Klasse models were strong and "good news both for the manufacturer ‌and for the suppliers involved in the project", Peter told journalists in Paris.

The Neue Klasse is a suite of new models underpinning an ambitious overhaul of BMW's lineup at a time of fierce competition with ‌Chinese competitors. The German premium automaker's shares fell further on Thursday, hitting their lowest levels since ‌November 2, 2020, after target price cuts by brokerages, including from Citi and HSBC, in the wake of the warning.

At 1415 GMT, BMW's shares traded 5.3% lower and were at the bottom of Germany's blue-chip index, with analysts noting the impact ⁠from ​the guidance cut which ⁠was triggered by prolonged weakness in the crucial Chinese market as well as the Iran war. "The magnitude of this ⁠latest downgrade – the third predominantly China-driven downgrade in as many years – is greater than we had anticipated," Berenberg analysts ​wrote.

"This could prompt a more profound strategic reset under the incoming CEO," they added, referring ⁠to Milan Nedeljkovic, who took over from longtime leader Oliver Zipse last month. Analysts have said BMW may announce capacity cuts ⁠in ​Europe as a result and accelerate its strategy of localising production in North America and China.

Peter said BMW remains quite confident in the U.S. market, which is stable and important, but it ⁠was selling less in Europe than it manufactured there, despite its local strategy. There was room for ⁠foreign automakers in China, ⁠which remains the world's biggest auto market and has seen a brutal price war, alongside local manufacturers, Peter added.