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BMW on track for record car sales
The German luxury car maker reached record sales this year.
FRANKFURT - German luxury car maker BMW said it was on track to hit record vehicle sales and pretax profit in 2014 after strong sales in China helped it to post a 2.6 percent rise in first quarter operating profit as forecast.
BMW is investing to expand production capacity and its model range to retain the crown of biggest selling luxury car maker ahead of Audi and Mercedes. That spending dented earnings before interest and tax, which came in at€2.09 billion, just above the €2.05 billion ($2.83 billion) average forecast in a Reuters poll.
BMW's automotive earnings before interest and taxes (EBIT) margin, the best gauge to compare profitability with peers, was 9.5 percent in the quarter, higher than the 7 percent achieved by rival Mercedes-Benz Cars but short of the 10.1 percent achieved by Audi.
Group vehicle sales of BMW, Mini and Rolls-Royce cars were up 8.7 percent in the quarter, a new record, helped by a 25 percent jump in sales in China.
In Europe sales climbed 3.4 percent, even as sales in Germany fell 1.4 percent and US sales edged up 2.7 percent, compared with the first quarter of 2013.
BMW-branded car sales were up 12.1 percent driven by demand for the X1, X3 and X5 offroaders and its 3-series sedan. That helped to offset a 12.5 percent fall in sales at Mini as the company prepared to launch a new version of the brand's core model.
Munich-based BMW reiterated its aim to achieve a significant rise in sales volume in 2014 to 2 million cars or more - after it delivered a record 1.96 million Mini, Rolls Royce and BMW cars in 2013 - but cautioned that political and economic uncertainty may impact sales in Europe.
BMW Group also reiterated its forecast of a significant rise in group profit before tax to compare with the previous year's figure of 7.91 billion euros.
But it added that the pace at which earnings increase would be influenced by high levels of expenditure for new technologies, fierce competition and rising personnel expenses.