After BMW’s third-quarter earnings surpassed analyst expectations, it is sticking with plans to raise its 2012 profit. BMW benefited from gains it got from auto loans. BMW, the largest luxury carmaker in the world, aims to increase deliveries in 2013, helped by growth in the U.S. and China. BMW, which is supported by new models such as an extended version of the 3-Series sedan, intends to raise sales in China by over 10%, exceeding the market.
In a conference call, Chief Financial Officer Friedrich Eichiner said that it expects its striking product lineup to produce positive momentum next year even as Europe struggles and worldwide growth gets even slower. BMW experienced growth in the U.S. and Asia and so it has mostly been unaffected by the crisis related to sovereign debt, which will likely cause the steepest decline in European auto demand in almost 20 years in 2012.
Daimler AG’s Mercedes-Benz has reduced its profit targets and has started a cost-cutting plan due to the sluggish Europe market and its aging models. BMW announced recently that it has no need for a special savings program. Its earnings in the third quarter before interest and taxes increased by 14% to 2 billion euros ($2.6 billion), pulled upwards by a 16% increase in profit at the financial services division.
This figure did better than the 1.74 billion-euro average of 11 estimates that Bloomberg gathered. Sales rose by 14% to 18.8 billion euros. Net income surged 16% to 1.29 billion euros. Juergen Pieper, a Frankfurt-based analyst at Bankhaus Metzler, said that the auto industry is the “only little hair in the soup” since pricing pressure in Europe affected the margin.
He added that since there are also earnings from the financial services, the focus has moved a bit. BMW had earlier dropped by up to 2.6% but it later fell 0.2% at 64.34 euros as of 3:40 p.m. in Frankfurt trading. This year, the stock grew 24%, putting the value of the company at 41.1 billion euros and making it have a much higher value than Daimler, which is also a producer of heavy-duty trucks and buses.