BMW powers through second quarter towards record year

 02 Aug 2016 - 11:30

BMW powers through second quarter towards record year
BMW presents the 'Vision Next 100' concept car during centenary celebrations at the Olympic Hall in Munich, southern Germany March 7, 2016. (REUTERS/Michael Dalder/File Photo)


Frankfurt: A favourable world auto market helped German carmaker BMW to post profits 11 percent higher in the second quarter than the same period last year, results released on Tuesday showed.

The Munich-based firm said that it had made 1.95 billion euros ($2.2 billion) of profit on 25 billion euros of revenue.

Fuelled by strong results, BMW has "the financial headroom we need to pursue our work on future technologies such as electric mobility and automated driving," chairman Harald Krueger said.

"We forecast slight increases, and hence new record figures, for sales volume and profit before tax in 2016," Krueger went on.

BMW outdid predictions from analysts surveyed by Factset, who had been expecting profits of 1.69 billion euros.

Welcoming the results as "solid", analysts at DZ bank pointed to BMW's higher-than expected profitability on car sales as a key factor making it a "top pick" among German carmakers.

But Deutsche Bank analysts suggested that performance could fade in the second half of the year as the firm faces increased costs.

Unit sales across BMW's three car brands -- BMW, Mini, and Rolls Royce -- hit 605,534 between April and June, a 5.7 percent increase on the same period in 2015.

That brought underlying, or operating, profit to 2.7 billion euros -- eight percent higher than the same period in 2015.

Most of BMW's growth came from Europe and Asia, with unit sales up 11.2 percent and 7.3 percent.

But unit sales in the Americas declined overall by 8 percent, with a double-digit drop of 10.2 percent in the important USA market.

Growth was largely driven by increased orders for flagship models such as the BMW 7 series.

The firm also said that electric models accounted for a larger proportion of vehicles sold.

Customers in the Netherlands and Sweden were particularly keen, with electric cars accounting for double-digit proportions of BMW car sales in June in the two Western European nations.