BMW’s first-quarter operating profit declined 2.5 percent because of “unfavourable currency factors” and expenses on new technologies.
The brand’s earnings before interest and taxes dropped to 2.46 billion euros (2.84 billion dollars) from 2.52 billion euros a year earlier, a result slightly under the analysts’ expectations from the Munich-based premium maker. BMW said the quarterly financial outcome was influenced by increased sales volume on the one hand and unfavourable currency factors, such as the value of the British pound and the Chinese renminbi against the euro, on the other. Furthermore, the company also sped up its development efforts to bring up front more technologies that would allow it to hold on to its leading position of the premium segment in front of a stronger-than-ever Mercedes-Benz. “The decisive factor for us is not short-term profit but sustainable, profitable growth,” CEO Harald Kruger said. ”From this position of strength, we intend to play a pioneering role in transforming and shaping the world of individual mobility going forward.”
After it set a new sales volume record for the first quarter with 478,743 units, BMW is aiming for its highest-ever sales in 2016, which would be its seventh record in a row. However, after such a long period of sales-dominance by BMW in the luxury sector, Mercedes-Benz is closer than ever to retake the title this year, as it sits in front of its rival after the January-March timeframe, with total sales of 483,487 vehicles. “We forecast slight increases, and thus new record figures for sales volume in the Automotive segment and group profit before tax in 2016,” Kruger added, but he also warned of high levels of upfront expenditure for new technologies, intense price competition and rising personnel expenses.