Business

BMW Q3 profit rebounds on China demand for luxury cars

FRANKFURT: BMW said on Wednesday that third-quarter profit had increased by about 10% due to Chinese demand for luxury cars and has reiterated its outlook, even as a wave of coronovirus infections in Europe and the United States Is also continuing.

Like rival Mercedes, BMW’s quarterly pretax profit recovered in the third quarter, up 9.6% to 2.46 billion euros ($ 2.87 billion), with delivery of luxury cars up 8.6%.

Automotive EBIT (earnings before interest and tax) margin was reduced to 6.7%, minus 10.4% in the second quarter and 6.6% from a year earlier, with a 50% jump in low-margin electric and hybrid car sales during the same period. Despite .

BMW-branded vehicles jumped 9.8% in deliveries during the quarter, thanks mainly to a 31% spike in China, which helped drive a 15.7% drop in demand in the United States, where demand was impacted by the epidemic was.

BMW reiterated hopes for the automotive segment to achieve EBIT margins between 0% and 3% in 2020.

BMW said that despite a decrease in demand in some markets, overall delivery of high-end vehicles as well as group pretax profit is expected to be significantly lower than last year.

“The level of risk has been assessed due to the negative impact of the epidemic. After a more stable phase in the economic environment in the third quarter, the epidemic is now clearly returning,” the carmaker said.

“If the epidemic takes an even more severe course and the global economy experiences a perceptible slowdown, the risk may be considerable, especially on the demand side.” ($ 1 = 0.8581 euro)

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