BMW Third-Quarter Profit Increases on Demand for 5-Series Sedan, X3 SUV

Bayerische Motoren Werke AG (BMW), the world’s largest maker of luxury vehicles, reported a 44 percent gain in third-quarter profit because of increased demand for the X3 sport-utility vehicle and 5-Series sedan.

Earnings before interest and taxes rose to 1.72 billion euros ($2.35 billion) from 1.19 billion euros a year earlier, the Munich-based company said today in a statement. Profit beat the 1.58 billion-euro average estimate of 18 analysts surveyed by Bloomberg. Revenue climbed 3.8 percent to 16.5 billion euros.

Growth has slowed for high-end carmakers from the record pace in the first half as Europe’s debt crisis unsettles consumers. Daimler AG (DAI), the parent of Mercedes-Benz, reported its first drop in earnings since the third quarter of 2009, burdened by expenses for new models. H.R. Owen Plc, a London dealer of BMW, Aston Martin and Ferrari vehicles, predicted a loss in the second half because deteriorating demand for luxury cars.

BMW stuck to its forecast that sales and profit in 2011 would be “significantly higher” than last year’s. The maker of BMW, Mini and Rolls-Royce cars is targeting an Ebit margin at its auto unit of more than 10 percent for the year, with sales projected to reach a record of more than 1.6 million vehicles. The company plans to generate an Ebit margin of 8 percent to 10 percent for 2012 and beyond.

BMW has dropped 13 percent since reporting second-quarter earnings on Aug. 2. Over the past quarter, growth in car sales slowed to 9 percent from 18.5 percent in the second as the 1- and 3-Series get renewed and the aging X5 sport-utility vehicle faces the revamped Mercedes-Benz M-Class. Deliveries of all three models declined in the period, according to BMW data.

BMW and Mercedes have recently highlighted their ability to adapt to slowing markets. Daimler Chief Executive Officer Dieter Zetsche said Oct. 27 that the automaker’s production flexibility means it “can react quickly to future developments.” BMW’s manufacturing chief Frank-Peter Arndt said last week that the company is prepared to reduce production volumes 20 percent to 30 percent if necessary.

Mercedes’s third-quarter Ebit fell 15 percent to 1.11 billion euros as it introduces the B-Class, the first in a line of five new small cars. Audi’s Ebit rose 56 percent to 1.4 billion euros, boosted by demand for the A6 sedan and Q5 SUV.

Even with profit margins narrowing, BMW has widened its sales lead over Audi and Mercedes, which have both vowed to topple BMW as the luxury-car leader. The company delivered 1.02 million BMW-brand vehicles after the first nine months of 2011, compared with Audi’s 973,200 and Mercedes’s 919,288. BMW is targeting sales of more than 2 million cars by 2020 and is considering new models and factories to fuel the expansion.

To contact the reporter on this story: Chris Reiter in Berlin at creiter2@bloomberg.net

To contact the editor responsible for this story: Chad Thomas at cthomas16@bloomberg.net

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