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BMW Hits Skids Despite Strong China Growth

Net profits came to US$1.58 billion in Q2 but declined 28.1% on the same period last year.

Luxury carmaker BMW (IW 1000/37) said Wednesday its net profits had dropped sharply in the second quarter of the year despite strong sales growth in Asia, especially in China.

Net profits came to 1.28 billion euros (US$1.58 billion) in the second three months of the year, BMW said, a decline of 28.1% on the same period in 2011.

Sales rose by 7.3% to 19.2 billion euros. The firm blamed high staff costs, greater expenditure on research and "intense market conditions" for the fall in profits.

The group stuck to its full-year target of beating last year's performance in terms of pre-tax earnings and sales volume.

Sales were sluggish in crisis-hit Europe (down 0.1%), solid in North America (up 10.3%) and stellar in Asia (up 25.6%) driven mainly by China.

BMW sold a total of 159,358 vehicles in China, a gain of 30.6 percent. Sales were also strong in Japan, showing a 27.3% gain to 27,737 vehicles.

Board chairman Norbert Reithofer said the firm had continued to perform "extremely well."

We have achieved new sales volume and revenue highs as well as the second best operating profit in the company's history," he said.

BMW employs some 102,007 staff worldwide.

Copyright Agence France-Presse, 2012

TAGS: The Economy
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