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BMW Profit Drops Amid Slump in Europe, China Markets

May 2, 2013

Munich-based BMW said its underlying profit, as measured by earnings before interest and taxes, came in at 2.04 billion euros (2.69 billion dollars) during the first three months of the year - down from 2.134 billion euros in the same period in 2012.

The group reaffirmed its targets for 2013, saying it expects record high sales and a pre-tax profit to match last year's record. It also expects an operating margin of between 8 and 10 per cent in its core automotive operations.

"Due to high levels of expenditure for new technologies and models, as well as investment in the production network, we expect to report group profit before tax for 2013 on a similar scale to 2012," said chief executive Norbert Reithofer.

First quarter net profit fell 3 per cent to 1.3 billion euros, BMW said.

The group's results were hit by contraction in the European market, where a recession is pushing down car sales and sparking a round of intense competition and discounting.

"We do not expect to receive a great deal of impetus from most European markets over the next few months and economic conditions in these areas are likely to remain challenging," Reithofer said.

Demand in China, the world's biggest car market, also weakened, growing at a slower pace in the first three months of the year than for the whole of 2012, BMW said.

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Source: Copyright 2013 dpa Deutsche Presse-Agentur GmbH

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