BMW Ag., the world’s largest premium carmaker has reported a sharp fall in profits in the second quarter due to higher costs for staff and investments in new technology.
However, despite the fall in profit against the same quarter last year, the company recorded record sales. It also held on to its outlook and maintained its high profit margins on automobile sales.
“We have achieved new sales volume and revenue highs as well as the second best operating profit in the company’s history,” BMW Chief Executive Norbert Reithofer said in a statement.
Net profit for the three months to the end of June was 1.28bn euros ($1.58bn; £1bn), down 28% from a year earlier. Revenue rose 7% to 19.2bn euros.
Vehicle sales rose by 5.4% to 475,011 during the quarter, and broke the 900,000 level for a half-year period for the first time.
BMW Group, which includes the compact Mini and top-of-the-range Rolls-Royce brands alongside core BMW models, maintained its 2012 aim of “exceeding the previous year’s sales volume and pre-tax earnings.”
Analyst Max Warburton at Sanford C. Bernstein in London wrote that “BMW’s numbers are still good but they are not great, unlike second quarter 2011.” He said profit margins had fallen from 13.9 percent in the year-ago quarter due to tough price competition in Germany and China.