BMW stays on top thanks to profit leap

New models and strong sales in China helped BMW to beat second-quarter profit forecasts and keep it on track to remain the world’s biggest luxury carmaker under the challenge of its German rivals.

Sales by the core BMW brand rose 8.3 per cent to 458,000 vehicles, a record high, as new models such as the 4-series coupe and 2-series compact helped the group to tap stronger demand in China and Europe.

Earnings before interest and tax (EBIT) jumped 26 per cent to 2.6 billion euros (£2.61bn), the company said yesterday.

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“This is a major beat and we remain convinced that the street is underestimating BMW’s medium and long-term earnings power,” London-based ISI Group analysts said.

Luxury carmakers weathered a six-year sales slump in Europe thanks in part to strong demand from emerging markets. But signs of a slowdown in some of those countries and a still fragile recovery in Europe has raised concerns about future demand.

BMW also faces strong competition from arch rivals Audi, part of the Volkswagen group and Mercedes-Benz, owned by Daimler.

BMW cautioned yesterday that the crisis in Russia was starting to make itself felt.

After showing little change in the first six months, regional sales fell more than 11 per cent in July, chief executive Norbert Reithofer said.

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