Bayerische Motoren Werke AG (BMW), the world’s biggest maker of luxury vehicles, reported an 8.8 percent drop in second-quarter profit as spending on new models to stay ahead of competitors offset higher sales.
Investments to expand factories and produce carbon-fiber parts for its first electric car caused the decline, even as cost-cutting lifted other European auto manufacturers. Earnings before interest and taxes fell to 2.07 billion euros ($2.74 billion) from 2.27 billion euros, the Munich-based said today. Revenue rose 1.8 percent to 19.6 billion euros on a 6.6 percent gain in car deliveries.
BMW is rolling out 25 new models in 2013 and 2014, with 10 of them, such as the Rolls-Royce Wraith, having no predecessor. Rivals aren’t standing still. Mercedes is bringing out 13 all-new models by the end of the decade. Audi plans to double its SUV lineup to six by 2020, a person familiar with the matter said in February.
Global deliveries of the BMW brand rose 7.7 percent in the first half to 804,248 cars and SUVs, maintaining a 23,748-vehicle lead over Audi. Mercedes trailed behind in third place, with 694,433 deliveries.
The second-quarter margin at BMW’s auto division declined to 9.6 percent from 11.6 percent a year earlier and compares with a second-quarter operating margin of 9.9 percent at Audi and 6.4 at Mercedes. BMW reiterated today that Ebit at the auto division will be in the range of 8 percent to 10 percent of sales this year.
“Challenges are what drive us,” said Reithofer. “We intend to remain the industry leader.”
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