BMW posted a 4.5-percent decline in operating profit (earnings before interest and taxes) in the first quarter of 2013 to EUR2.04 billion ($2.69 billion) from EUR2.13 billion in the same period in 2012, no thanks to the receding vehicle market in Europe that pushed car prices lower. BMW reiterated its 2013 forecast of pretax profit being on the same level as 2012, buoyed by the rising demand in the U.S. and China.
Strong sales in the US and China helped BMW to offset any fiscal impact of the ongoing financial crisis in Europe. Banking on new models like the 4-series and 3-series GT, BMW is aiming to post record deliveries in 2013, but warned that high levels of expenses will eat into profit growth. BMW chief executive Norbert Reithofer remarked that the carmaker expects to post group profit before tax for 2013 on a similar level to 2012, no thanks to high levels of expenditure for new technologies and models as well as investment in the production network.
BMW's automotive profit margin in the first quarter of 2013 dropped to 9.9% from 11.6% in the same period in 2012. Audi, on the other hand, posted an 11.1-percent profit margin in the period. The profit margin of Mercedes' auto division declined to 3.3% in the first quarter of 2013 from 8.2% in the same period in 2012.
BMW reiterated that EBIT at its auto division in 20013 will be between 8% and 10% of sales. Frank Biller, a Stuttgart-based analyst with LBBW, told Bloomberg News that the EBIT margin at BMW’s auto division was “an impressive performance." He said that whether the carmaker can reach the upper end of the margin range will depend on the second quarter and the expected improvements in the second half of 2013.