German vehicle manufacturer BMW has recorded significant growth in revenue inspired by high demand from different markets led by China.
A statement from the manufacturer indicates that preliminary Q1 2021 earnings before tax surged 370% to €3.76 billion ($4.53 billion) compared to Q1 2020. Elsewhere, automaking operations earnings before interest and taxes grew to €2.2 billion ($2.7 billion). Furthermore, the operating margin under the car-making unit rose to 9.8% from 1.3% from Q1 2020.
Elsewhere, the financial services segment grew 62.6% from a year ago to €787 million ($947 million). The company has now set the site on doubling automaking revenues to about 6% or 8%.
The manufacturers note the earnings surpassed expectations.
“Positive price and mix effects, as well as high demand for pre-owned cars, also lead to key financial performance figures of BMW AG which exceed market expectations in a positive current environment,” said BMW.
BMW is scheduled to announce full earnings figures on May 2021.
An automotive sector under recovering from the pandemic
The results indicate that the automotive sector is recovering following a challenging past year due to the economic impact of the coronavirus pandemic.
Although there is recovery from the pandemic, the automotive industry, in general, is facing supply chain issues. The shortage of semiconductors continues to hamper production.
Unlike other manufacturers, BMW made significant semiconductor orders last year, when Asian markets embarked on recovery. BMW leadership has maintained that they are working towards avoiding production inconveniences in the second quarter.