BMW third-quarter profit rebounds on China demand for luxury cars

BMW third-quarter profit rebounds on China demand for luxury cars
BMW-branded vehicles saw a jump of 9.8 percent in deliveries during the quarter, mainly thanks to a 31 percent spike in China. (Reuters)
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Updated 04 November 2020

BMW third-quarter profit rebounds on China demand for luxury cars

BMW third-quarter profit rebounds on China demand for luxury cars
  • Like rival Mercedes, BMW’s quarterly pretax profit recovered in the third quarter
  • ‘The level of risk due to the negative impact of the pandemic is assessed as high’

FRANKFURT: BMW said on Wednesday third-quarter profit rose almost 10 percent thanks to rebounding Chinese demand for luxury cars and it reiterated its outlook, even as a wave of coronavirus infections continues to sweep Europe and the United states.
Like rival Mercedes, BMW’s quarterly pretax profit recovered in the third quarter, rising 9.6 percent to $2.87 billion, lifted by an 8.6 percent rise in deliveries of luxury cars.
The automotive EBIT (earnings before interest and tax) margin rebounded to 6.7 percent, from minus 10.4 percent in the second quarter and 6.6 percent a year earlier, despite a 50 percent jump in sales of lower-margin electric and hybrid cars during the same period.
BMW-branded vehicles saw a jump of 9.8 percent in deliveries during the quarter, mainly thanks to a 31 percent spike in China, which helped offset a 15.7 percent drop in demand in the United States, where demand was being hit by the pandemic.
BMW reiterated it expected to achieve an EBIT margin of between 0 percent and 3 percent for the automotive segment in 2020.
Despite a recovery in demand in some markets, overall deliveries of high-end vehicles as well as group pretax profit are expected to be significantly lower than last year, BMW said.
“The level of risk due to the negative impact of the pandemic is assessed as high. After a more stable phase in the economic environment in the third quarter, the pandemic is now clearly regaining momentum,” the carmaker said.
“If the pandemic takes an even more serious course and the global economy experiences a perceptible downturn, the risk exposure could be considerable, particularly on the demand side.”