2011 5-Series beats Audi, Mercedes-Benz and helps Bmw post record profit

Article by Christian Andrei, on May 4, 2011

BMW reported today a 4,462-euro profit per vehicle on average, which is a record high for the company in its entire 95-year history, compared with 2,981 euros at Volkswagen AG's Audi and 4,145 euros at Daimler AG's Mercedes-Benz.

For the first quarter of 2011, the company recorded an increase in operating margin to 11.9 percent from the 2.7 percent reported on the same period last year. The company’s profit outperformed the average estimates of analysts with the surging demand for overhauled X3 sport-utility vehicle and revamped 5-series sedan.

Specifically, the company’s earnings before taxes and interest increased more than four times to 1.9 billion euros ($2.81 billion), which beats the average estimate of 1.54 billion euros that Bloomberg had compiled from 14 analysts.

According to analyst Arndt Ellinghorst at Credit Suisse in London, BMW “seems like” it is playing a different league as of the moment.

Norbert Reithofer, BMW’s chief executive officer, is pushing the company to strengthen profitability to maintain its independence as well as defend itself from Audi, which is targeting to outperform BMW as the market leader in luxury vehicles by 2015.

The company has exited the Formula One race circuit, reduced employees as well as lessened expenditures on parts and supplies by at least 4 billion euros since 2008.

The positive economic growth in China and the rebound in spending in the United States are helping record demand for luxury vehicles from Audi, Mercedes and BMW.

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