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High investments squeeze BMW profits

August 02, 2019


Abstract : BMW may have sold more cars in the second quarter, but it fell short in terms of profit.

The logo of the Munich car manufacturer BMW. (picture alliance/dpa)

BMW may have sold more cars in the second quarter, but it fell short in terms of profit.

At 2.05 billion euros (2.26 billion dollars), its profit before tax was down 28 per cent compared to a year ago, the German carmaker said on Thursday. Increased investments in new technologies were the main cause.

Research and development expenses grew by 6 per cent to reach 1.4 billion euros in the second quarter.

Investments in its facilities even increased by 39 per cent to 1.2 billion euros. BMW is reconfiguring its assembly lines to allow for the parallel construction of combustion, electric and hybrid cars.

"The growing proportion of electrified vehicles is also contributing to higher production costs," the car manufacturer said in a statement.

"Unfavourable exchange rate factors and rising prices for raw materials had a dampening impact on earnings between April and June," it added.

BMW managed to sell more cars in the second quarter particularly in China. The group's revenues rose by nearly 3 per cent to 25.7 billion euros.

But its results nevertheless took a hit, with a bottom line of only 1.48 billion euros in net profit remaining - 29 per cent less than a year ago.

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