As auto sales in Europe decline and BMW raises spending to launch 25 new models within the next two years, it still didn’t change its forecast for its pretax profit for 2013. During the annual press conference, Chief Financial Officer Friedrich Eichiner said that the past several years’ high returns can’t be considered as the normal state.
He also said that to meet its targets, the company will have to deal with high up-front investments in new technologies. BMW is competing with Audi for the No. 1 spot when it comes to worldwide deliveries. In the first two months of the year, the BMW brand lead had shrunk to only 407 units. BMW’s deliveries in Europe fell by 2.8% in February as the auto sales in the region fell by 10%.
Pretax profit rose by 6% to 7.82 billion euros ($10.1 billion) in 2012 as revenue increased by 12% to 76.8 billion euros. The outlook released by BMW is actually better than the analysts’ average estimate of its profit decreasing by 1.3% to 7.72 billion euros. BMW will launch 11 models this year. These include the 3-series GT and 4-series coupe. It’s currently preparing to start production of its first electric vehicle, the i3 city car, as part of a strategy to achieve its third straight year of record sales.
Ten of the 25 new vehicles that will be introduced to the market through 2014, such as the X4 sport-utility vehicle, don’t have a predecessor. Eichiner said that BMW will boost its research and development investments in 2013 and that the ratio of spending to sales will surpass the range of 5% to 5.5% being targeted.
In 2012, this figure had been 5.1%. BMW, like VW and Daimler, is expecting that 2013 profit will be unchanged even as the car market in the region falls for a sixth consecutive year after falling to its lowest point in 17 years in 2012. The ACEA industry group said that all three posted declines in European sales in February.