BMW earned record per-car profit in the second quarter, helped by growing wealth in China, a rebound in U.S. spending and demand for the 5-series sedan. Hit the jump to read the rest of the story.
BMW generated the highest profit margin of the top three luxury-car makers, with its auto unit posting earnings before interest and taxes equivalent to 14.4 percent of sales, up from 9.6 percent a year earlier. That beat margins of 11.8 percent at Audi and 10.7 percent at Daimler AG’s Mercedes-Benz.
“For an analyst who’s covered BMW for 11 years it’s amazing to see this level of earnings,” said Max Warburton, a London-based Sanford C. Bernstein analyst. “At no point in the past would it have been imaginable that this company could make margins of this level.”
Demand for the revamped 5 series and X3 sport-utility vehicle helped the maker of BMW, Mini, and Rolls-Royce models keep its high-end segment lead.
Deliveries this year of the 5 series have jumped 80 percent and the X3 has more than doubled, fueling an 18 percent rise in the BMW brand’s first-half deliveries. Audi, which passed Mercedes this year and aims to topple BMW by 2015, also boosted sales 18 percent.
“We are producing at the limit” and the waits for some models like the X3 are “too long,” said BMW CEO Norbert Reithofer.
BMW’s second-quarter Ebit climbed 66 percent to 2.86 billion euros, the Munich-based carmaker said today. Profit beat the 2.3 billion-euro average estimate of 17 analysts surveyed by Bloomberg.
“This is not a one-time event for BMW,” said Arndt Ellinghorst, a London-based Credit Suisse analyst. “They have the strongest product lineup and best execution in the market.”
Germany’s luxury-car makers are ramping up production to satisfy growing demand in China and rebounding spending in the U.S.