German car manufacturer, BMW, announced today that it has lowered its profit forecasts for this year due to the armed conflict between Russia and Ukraine.

With the effects of the conflict on car production, BMW now forecasts a variable profit margin between 7% and 9%, before interest and taxes, in the automotive segment.

Before the military disturbances the company was forecasting profits in the range of 8 to 10%.

Despite the semiconductor shortage, in 2021, BMW sold a record 2.52 million vehicles and achieved a profit margin of 10.3%, the highest since 2017.

BMW, which more than doubled pre-tax profits in 2021 to $17.67 billion, said it expects a significant increase in pre-tax profits for the current year as a result of the full consolidation of BMW Brilliance in China.

The company said that the war in Ukraine made it difficult to give a clear outlook for 2022 and that it could not include in its forecast any potential long-term implications of the war.

Supply obstacles to semiconductor components will also likely remain a problem, said BMW, which does not expect the situation to improve until the second half of 2022.