BMW’s profit gained 7.9 per cent in the second quarter as the luxury car maker boosted sales of its new X1 compact 4x4 and kept a tight grip on costs.
Earnings before interest and tax rose to €2.73 billion (Dh11.21bn) from €2.53bn last year. That compares to the €2.67bn average of 10 analyst estimates compiled by Bloomberg. BMW’s result comes after Daimler, the maker of Mercedes-Benz cars, and Volkswagen beat expectations with earnings that excluded one-time costs.
BMW lost its leading position in the world’s luxury-car market to Mercedes in the first half after its rival added a range of new models and revamped its business-focused E-Class saloon. BMW has said it will focus instead on profitability as it invests in technology, such as self-driving features, to compete with new rivals including Uber and Tesla Motors.
Return on sales from car making was 9.5 per cent, compared with 8.4 per cent in the same quarter last year. That compares with a profit margin of 10 per cent for Mercedes and 7.6 per cent for Audi.
BMW is at a comparatively weaker point of its product cycle. It is preparing for next year’s remake of the 5-Series saloon, which competes with the Mercedes E-Class that went on sale in March. Another challenge has been US customers’ shift toward 4x4s, which has led to deeper discounts on the saloons at the core of BMW’s line up. The car maker altered plans to boost production of models such as the X5 4x4 at its factory in Spartanburg, North Carolina, in reaction to the change in demand.
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