BMW Group posted a 14 percent jump in earnings before interest and taxes in the third quarter of 2012 to EUR2 billion ($2.56 billion) from EUR1.76 billion in the same period in 2011, thanks to a steady gain in China that helped mitigate dwindling demand for vehicles in Europe. BMW also posted a 14-percent increase in sales to EUR18.8 billion.
BMW chief executive Norbert Reithofer said in the statement that the carmaker has had a good third quarter -- setting new sales volume, revenues and earnings records despite a challenging market environment. Reithofer admitted that like the rest of the auto industry, the carmaker is now beginning to feel some headwind.
BMW has so far managed to offset the effects of the current sovereign debt crisis in Europe, which has caused the vehicle demand in the region to drop continuously. The carmaker’s resistance to the European crisis is mainly attributable to its strong performance in China, where the group posted a 33.3 percent increase in sales in the first nine months of 2012.
In contrast, follower German carmaker Mercedes-Benz has trimmed its profit targets for 2012 and commenced a EUR2 billion cost-cutting plan. BMW retained its full-year forecasts for 2012, which include surpassing its EUR7.38 billion in pre-tax profit posted in 2011 and logging a higher earnings before interest and taxes in its auto division. The carmaker expects to post automotive profit margins at the "upper end" of a range of 8 percent to 10 percent of sales, given that the global economy does not deteriorate further.
Audi, BMW's closest rival in global sales, recently disclosed that its operating profit dropped to EUR1.3 billion in the third quarter of 2012 from EUR1.4 billion in the same period in 2011. Audi, however, is optimistic that it could match its 2011 operating profit of EUR5.35 billion ($6.92 billion). BMW Group, on the other hand, announced targets to deliver more than 1.7 million cars in 2012, logging new sales records at its BMW, Mini and Rolls-Royce brands.