German luxury automaker, BMW (ETR:BMWG_p) revealed Tuesday that the company raised its annual outlook for its margin on EBIT in the automotive segment. However, the company also expressed concerns about persisting challenges arising from supply chain issues and inflation in the latter half of the year.
BMW now expects an EBIT margin on its cars division to be between 9% to 10.5%, up from the previous range of 8% to 10%. The company anticipates robust growth in deliveries, as opposed to only slight growth previously predicted. This positive outlook is based on a strong order bank and improved availability of its premium vehicles.
However, the German automaker has adjusted its forecast for free cash flow to be above €6 billion ($6.58B), down from the previous estimate of around €7B, citing the need to stock up its inventories and higher investment in electrification.
BMW is expected to report its quarterly results on August 3rd. The company reported preliminary figures of a 12.6% group margin on EBIT in the first half of 2023 and a 10.6% EBIT margin in the automotive segment, helped by higher sales and pricing.
During the first half of the year, BMW experienced a notable 4.7% increase in sales compared to the same period last year. Last year's sales were impacted negatively by supply chain issues resulting from various factors, including the war in Ukraine and lockdowns in China, which affected the company's production output.