BMW Q3 2012 Profit Rises To $2.6 Billion But Profit Margin Below Audi's

Bayerische Motoren Werke AG (BMW) stood by plans to increase 2012 profit after third-quarter earnings beat analyst expectations, helped by gains from auto loans.

The world’s biggest maker of luxury cars is pushing to boost deliveries next year, led by growth in the U.S. and China. Backed by new models like an extended version of the 3-Series sedan, the Munich-based company plans to increase sales in China by more than 10 percent, outpacing the market.

“We expect our attractive product lineup to generate positive momentum” in 2013, even as Europe stagnates and global growth slows further, Chief Financial Officer Friedrich Eichiner said today on a conference call.

Buoyed by growth in Asia and the U.S., BMW has largely been unscathed by the sovereign-debt crisis, which is set to cause the biggest drop in European auto demand in nearly two decades this year. Daimler AG’s Mercedes-Benz has lowered profit targets and initiated a cost-cutting plan because of the slowdown in Europe and aging models. BMW said today that it doesn’t need a special savings program.
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mclaren428 - 11/6/2012 12:10:22 PM

+4 Boost

Damn impressive for an independent car company its size!

JRobUSC - 11/6/2012 12:34:42 PM

+4 Boost

I read the article and thought "weird, this is a very positive article about how well BMW is doing -- the article doesn't match the tone of the thread headline at all." And then I noticed GermanNut posted it. Ah ha. Mystery solved.

GermanNut - 11/6/2012 12:50:22 PM

-5 Boost

JRob the title is fair, factual and completely accurate.

You just choose to play down the all-important profit margin figure.

JRobUSC - 11/6/2012 1:46:11 PM

+3 Boost

No, I choose to look at a three page article in its entirety, and not cherry pick one quote to spin into a thread title that does not represent the actual tone of the three pages. If you want to accuse someone of "playing down" one sentence from the article, start by not "playing down" the entire article yourself.

GermanNut - 11/6/2012 12:52:49 PM

-4 Boost

"That led to a decrease in the margin to 9.6 percent from 11.9 percent a year earlier. Incentives burdened its return on sales by as much as 1.2 percentage points, CFO Eichiner said."

"Volkswagen AG (VOW)’s Audi, the world’s second-largest luxury-car brand, reported a margin of 10.5 percent last quarter, outpacing the 6.4 percent at Mercedes."

BMW's strategy of offering big incentives in order to get more sales has hurt its profit margins as quoted above.

PQ40 - 11/6/2012 1:12:36 PM

+6 Boost

Great numbers put up by BMW.

Audi is just VW's puppet. They are only .9 ahead of BMW dispite sharing manufacturing plants, R&D, and platforms with VW! Shouldnt they be doing better??

PQ40 - 11/6/2012 1:46:57 PM

+2 Boost

"And yet you'd never consider saying that about Porsche or Lambo."

Yes I would.

Model for model they are evenly matched up until you get to Audi's A1, BMW has no direct rival, unless you count mini. The A1, A3, TT have heavy parts sharing with VW models, and are made in the same plants as VW's..

Only the Mini's engine/tran is co-developed, but the rest of the car is developed in house.

PQ40 - 11/7/2012 10:03:18 AM

+2 Boost

X1 competes with the Q3. Also BMW is not making an A1 rival they are expanding the 1 series range with a few FWD cars, but they all will be priced like a 1 series..which is comparable to the A3 not the A1.

PQ40 - 11/7/2012 2:19:57 PM

+1 Boost

Thing is it will share components with the new cooper, but will be larger, and most importantly will still be part of the 1 series family. The A1 cost less than a mini cooper! Whereas the BMW model will be a more premium version of the mini....A1 starting price is only 2K above a polo..BMW may go down in size, but not price...at least not the A1's level.

PQ40 - 11/7/2012 2:27:42 PM

+1 Boost

"Although no one has confirmed this so far, it is very likely that BMW rival for A1 to be a German version of the new Mini Cooper generation. Although the British model is expected only in 2014, the Bavarians could bring in showrooms, the 1-Series younger brother in 2013."

lol yet eveything you posted, it clearly states at the end it is speculation...Hmm 2013? Could the model they are refering to be the 1 series Gt which shares parts with the new mini, but is more premium, and its starting price will be around the same as a five door rwd 1 series.

GermanNut - 11/6/2012 1:49:12 PM

-3 Boost

Audi's lineup is smaller than BMW's. As Audi increases the size of its model range and continues to share platforms, R&D etc. with the Volkswagen Group, Audi's profit margin lead over BMW will widen dramatically.

enthusiastx11 - 11/7/2012 1:15:04 PM

+2 Boost

actually as they increase the size of the model range, audi profitability could go down. did you forget that more models means considerably higher development costs?

PUGPROUD - 11/7/2012 7:30:44 AM

+1 Boost

The greater margins are the result of many factors. Paramount are the advantages that Audi has from a development, procurement, efficiency and
mass corporate consolidation/allocation basis that being part of a huge well run singularly focused behemoth corporation. BMW is swimming upstream on its own with more limited breath and size, though doing a good job all things considered. An added advantage is that VW operations are headed by the family head...his singular strong will cuts thru all the committees and bulls**t that goes on in other organizations.

enthusiastx11 - 11/7/2012 1:13:40 PM

+2 Boost

damn impressive sales and profitability for any car company. especially an independent one.

iamdabest1 - 11/7/2012 10:35:55 PM

+2 Boost

this is further proof that you get ripped off entering an audi dealership..
they never seem to have good deals !!! ( i love audi, but damn your lease prices compared to bmw suck !! )