BMW quarterly profit leaps 700 per cent

GERMAN luxury car-maker BMW Group posted a 700 per cent jump in second-quarter pre-tax profit helped by strong sales growth in Asia, especially China where BMW volumes are running at twice the rate of last year.

Global vehicle sales by from the Munich-based company rose a modest 12.5 per cent in the three months to June 30 compared with 2009, but quarterly profit soared from €151 million ($A218m) last year to a company record of €1.299 billion ($A1.88b), eclipsing the previous record of €1.23 billion set in the pre-GFC market of 2006.

Major German car-makers have now clearly put the economic gloom behind them, with Daimler – maker of Mercedes-Benz and Smart cars – and Volkswagen Group – with a stable of 10 brands including Audi and Porsche – recently posting Q2 pre-tax profits of €2.1 billion and €1.9 billion respectively.

Left: Norbert Reithofer.

BMW AG board of management chairman Norbert Reithofer put the improvement down to sharp sales volume growth on major markets and a high-value model mix.

“We have also used the economic crisis as a source of opportunity and have improved efficiency significantly in all areas of the company,” he said.

“We have made good progress towards achieving our profitability targets for the year 2012, but we have no intention of resting on our laurels.” In Europe, BMW car sales are up just four per cent year to date, reflecting that market’s struggle to shake off the GFC.

In China, however, sales have soared 101 per cent, from 37,627 vehicles in the first half of 2009 to 74,615 units so far in 2010.

Sales volumes in Hong Kong and Taiwan have taken off almost as much, up 99.5 per cent to 81,807 units in the first half.

BMW sold more cars in Asia (128,845) than the United States, where BMW sales were up 6.4 per cent to 121,912 vehicles for the six months.

On the strength of the Q2 result, BMW has increased its yearly forecast, saying it now expects to sell 1.4 million vehicles in 2010 – a gain of 10 per cent over 2009.

However, Mr Reithofer cautioned that “some economic risk” remained.

BMW’s new 5 Series, which has been progressively rolled out around the world since going on sale in Germany in March, has helped to elevate BMW sales with a total of 25,000 units finding new homes so far.

The new X1 compact SUV contributed 46,705 units, while sales of the new 7 Series flagship have jumped 50 per cent to 30,711 sales thus far this year.

The X5 and X6 twins provided 68,632 sales – up seven per cent. Worryingly, BMW’s traditional best seller, the 3 Series small sedan could manage only a three per cent gain, to just under 200,000 units.