BMW Group (FRA:BMW) achieved new highs for sales volume, revenue and earnings on the back of strong demand in China for its luxury cars.
Third Quarter Results
In the June-September period revenue rose by 13.7 percent to €18.82 billion (£15.04 billion) from last year’s 3Q revenue of €16,55 billion (£13.24 billion). Profit before tax was 17.6 percent higher at €1.99 billion (£1.59 billion) and profit after tax increased 16 percent from last year’s €1,11 billion (£887 million) to €1.29 billion (£1.03 billion). The total number of BMW, Roll-Royce and MINIs shipped to customers during the last quarter increased by 9 percent to 434,963 units.
"We have had a good third quarter, setting new sales volume, revenues and earnings records in the face of a challenging market environment. We expect further sales volume growth for the fourth quarter, even though it is clear that we - and indeed the sector as a whole - are likely to be confronted with adverse business conditions", commented the Chairman of the Board of Management of BMW, Norbert Reithofer, on Tuesday in Munich.
The strongest sales increase came from China with a 33 percent surge from January to September, reaching 237,650 units. In Asia the group achieved a 27.1 percent increase in sales to 359,103 units. Despite highly unfavourable business conditions in some parts of Europe, in particular the peripheral countries of the Eurozone, sales volume overall edged up by 0.8 percent to 640,207 units. In the US the number of cars sold rose by 7 percent to 235,487 units.
BMW also increased its workforce year-on-year by 4.3 percent to 104,668 as it continued to recruit engineers and skilled workers to push ahead with innovations and development of new technologies.
The company announced it remains committed to beating its €7.38 billion (£5.9 billion) pre-tax profit in 2011. "We are on course to achieve new record figures for sales volume and pre-tax earnings in 2012", stated Mr Reithofer. He also admitted that international car markets do pose a challenge and the group is starting to “feel some headwind”.
Expansion in Brazil
BMW is set on investing €200 million (£160 million) in a new assembly plant in Brazil, which wiould be expected to produce 30,000 vehicles annually. The announcement has come shortly after rival manufacturer Audi decided to go ahead with the opening of a 150,000-unit plant in San Jose Chiapa, Mexico, as both carmakers eye growth opportunities in Latin America.
According to news agency Bloomberg, BMW has also negotiated measures with labour representatives at its German plant that will give it better control over production. The agreement allows the company to cancel shifts and curtail breaks if demand drops. Tens of thousands of cars meant for the European market were shifted in the third quarter towards the US and Asia as sales continue to weaken in the crisis-struck European economies.
Suzuki Leaves US Car Market
Meanwhile, Suzuki has taken the tough decision to pull the plug on its unprofitable car sales business in the US after almost thirty years of operations, with the company suffering from a stronger yen and a limited choice of vehicles that failed to excite the American consumer.
The Japanese carmaker announced today it would use a Chapter 11 bankruptcy filing by its US subsidiary in federal court in California to shut down its car business and focus on boats, ATVs ad motorcycles.
Through October this year Suzuki sold 21,188 vehicles or 5 percent less than the previous year in a car market that saw sales increase by 14 percent. This made the Japanese brand the second worst-selling in the country with first place taken by the Smart micro-car.