BMW battles to maintain sales lead
BMW REPORTED weaker profitability from its automotive operations in the fourth quarter as the world’s largest maker of luxury cars fights to maintain its lead over rivals.
Earnings before interest and taxes in the automotive division narrowed to about 8.2 percent of sales in the period from 9.2 percent a year earlier, according to calculations.
BMW’s group operating profit, meanwhile, rose 11 percent to 2.17 billion (R28.5bn), boosted by lower eliminations, which include leasing activities and other items.
“The underlying automotive business was less profitable than the market thought,” Dominic O’Brien with Exane Paribas said. “They got a positive swing from what we’d call non-core business.”
BMW’s main nameplate is under pressure to fend off Audi and Mercedes-Benz as delivery growth rates slow because of ageing models like the flagship 7-Series sedan and a recent dispute with dealers in China. Second-ranked Audi outsold the brand in the first two months of the year, while Mercedes posted the fastest growth rates of the German luxury carmakers. BMW’s stock has climbed 30 percent this year.
Fourth-quarter figures were derived by subtracting nine months from preliminary fullyear numbers that BMW published yesterday. A company representative confirmed the calculations.
The luxury carmaker is targeting a fifth consecutive record in annual vehicle sales this year as it introduces 15 new or revamped models, including at the Mini and RollsRoyce brands. To lure new customers, BMW is reaching into segments it once shunned, such as with the seven-seat Gran Tourer van.
Still, the brand failed to keep pace so far this year. Through February, Volkswagen’s Audi sold 260 250 vehicles, beating BMW’s deliveries of almost 256 000. Its growth rate of 5.7 percent trailed Audi’s 7.4 percent gain and Mercedes’s 14 percent jump. – Bloomberg