BMW lost its leading position in the world’s luxury-car market to Mercedes in the first half after its rival added a range of new models and revamped its business-focused E-Class sedan.
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Earnings before interest and taxes (EBIT) rose 7.9 per cent to €2.73 billion, above consensus for €2.65 billion in a Reuters poll.
BMW is at a comparatively weaker point of its product cycle. Another challenge has been U.S. customers’ shift toward SUVs, which has led to deeper discounts on the sedans at the core of BMW’s lineup. In the first half, unwillingness to make price concessions contributed to the sales decline in the US, said Mr. Eichiner. The company said strong profits are the key to investing in new technologies such as automated driving and electric vehicles.
Unit sales across BMW’s three vehicle brands – BMW, Mini, and Rolls Royce – hit 605,534 between April and June, a 5.7 percent increase on the same period in 2015. The company has promised to introduce a vehicle capable of driving itself by 2021, working with partners Intel Corp. and Mobileye NV, and on Tuesday highlighted an 87% first-half increase in the sales of its electric models.
Shares in BMW were down 2.2 percent to 75.40 euros at 0946 BST. BMW has dropped 23% this year, compared with a 5.2% decline in Germany’s benchmark DAX Index. BMW’s result comes after Daimler, maker of Mercedes-Benz cars, and Volkswagen beat expectations with earnings that excluded one-time costs. “It wasn’t the kind of beat we saw from the others, but there’s a lot less volatility”.
BMW chairman Harald Krueger said the vehicle maker’s performance was a new record for the second quarter, putting it on track to hit its targets for the full year in 2016. The company forecasts slight increases, and thus new record figures for sales volume in the Automotive segment and group profit before tax in 2016.
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Growth was largely driven by increased orders for flagship models such as the BMW 7 series.
