BMW Blames Profit Drop On Trying To Keep Ahead Of Audi

BMW Group reported an 8.8 percent decline in second-quarter profit as spending on new models including the company's first volume electric car offset higher sales.

Earnings before interest and taxes (EBIT) fell to 2.07 billion euros ($2.75 billion) from 2.27 billion euros a year earlier, BMW said in a statement today. Revenue advanced 1.8 percent to 19.6 billion euros, as car deliveries rose 6.6 percent.

BMW said second-quarter EBIT in its automotive division dropped 13 percent to 1.76 billion euros in line with expectations, due to increased spending on fuel-efficient technology and discounts in embattled European markets.

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mclaren428 - 8/2/2013 12:31:38 PM

+5 Boost

I couldn't find anything in BMW'S press release that stated what the title says, and that's because Bloomberg originally posted an article with this title.

Per BMW's press release...

"due to increased spending on fuel-efficient technology and discounts in embattled European markets."

Agent009 - 8/2/2013 12:47:00 PM

-1 Boost

According to the source these are the areas Audi is pushing BMW.

GermanNut - 8/2/2013 2:39:13 PM

-5 Boost

Well theoretically the headline is correct. BMW has made investments in all-new models such as the i3 electric car, 4-series coupe and upcoming X5 to obviously stay ahead of the competition. The closest competitor is Audi.

Given that Audi has dramatically reduced the global sales gap with BMW over the last 5 years to the point that Audi could definitely surpass BMW in annual global sales anytime between 2013 to 2020, BMW's increased spending could be viewed as an effort to keep Audi in second place in the global sales race.

quizz - 8/2/2013 7:37:32 PM

+3 Boost

Well technically, isn't R&D spending always about trying to stay ahead of any and all competition?

Today it's Audi, tomorrow it's MB and later Lexus.

Satriani1 - 8/3/2013 12:46:35 AM

-4 Boost

BMW quarterly profit falls on higher spending to keep ahead of Audi
http://europe.autonews.com/apps/pbcs.dll/article?AID=/20130801/ANE/308019992/bmw-quarterly-profit-falls-on-higher-spending-to-keep-ahead-of-audi#axzz2asTo0eR6

BMW Profit Declines as Spending to Keep Ahead of Audi
http://www.bloomberg.com/news/2013-08-01/bmw-profit-declines-as-spending-to-keep-ahead-of-audi.html

BMW Spends Profits To Ward Off Competitors
http://automotivedigest.com/2013/08/bmw-spends-profits-to-ward-off-competitors/

Look out, BMW: Audi's goal is world domination
http://m.theglobeandmail.com/globe-drive/new-cars/auto-news/look-out-bmw-audis-goal-is-world-domination/article1377489/?service=mobile