BMW surges back to profits and forecasts further growth

BMW has returned to profit after a surge in demand for its vehicles significantly boosted its first quarter trading compared with the same period last year.

Group revenues grew by 8.1% to €12.4bn during the first three months of this year, which compares with €11.5bn in 2009.Pre-tax profit during the period grew to €508m, which compares to a loss of €198m this time last year.

In all, the company sold 315,614 vehicles during the period. The figures include sales of the Mini and Rolls Royce.

In the same period last year, the German firm shifted 277,264 units.

Norbert Reithofer, BMW chairman, said: “We increased earnings significantly in the first quarter and are now back on a growth course on almost all car markets.”

With demand for premium vehicles rising and the launch of the new 5 Series to come later this year, the company is hoping to build on the momentum during the second quarter and beyond.

“We expect earnings will grow dynamically over the course of the year,” added Mr Reithofer.

The news will be a boost to the West Midlands’ beleaguered automotive industry although it underlines how tough the luxury sector is set to become.

Jaguar Land Rover, one of the German’s main rivals, has launched its new XJ saloon to steal a march on the opposition and the company has facelifted many of its 4x4s.

Mr Reithofer said the group was now well on its way to achieving its targets for the full year.

“We are aiming to achieve significantly higher group earnings in 2010 than in 2009, thus making a tangible step towards achieving the targets we have set for 2012,” he said.

He said that attractive products and the gradual recovery of the global economy would contribute towards rising sales.

In a clear message to rivals that the firm intended to maintain its dominance, Mr Reithofer said: “We intend to remain the world’s leading provider of premium cars in 2010 and plan to increase our sales volume within a solid single-digit percentage range to over 1.3 million vehicles.”

The group said it expected its Automobiles, Motorcycles and Financial Services divisions to all report better earnings this year.

Its Automobiles division saw pre-tax profits rise to €220m, which compares to a €471m loss this time last year. Sales volumes were up in almost all European and Asian markets as well as the United States.

Growth rates were especially high is Asia, with sales jumping by 55.7% to 58,918 units. In China, the group more than doubled the number of cars sold to 36,607 vehicles.

Business in North America was up 9.2%, with sales rising to 60,734 vehicles. The number of cars sold in the US rose to 7.5%. In Europe, sales rose 4.4%.

Sales of the group’s flagship 7 Series were up 54.1%, while the group said its ActiveHybrid7 had been well received. The new X1 crossover also sold well.

In a warning to Land Rover, BMW said sales of its X5 had increased 4.8% and that the X6 had risen by 21.2%.

The number of Minis sold in the period increased by 13.6%, while Rolls Royce recorded its best quarter sales volume to date with sales up 60.3%. The prestigious Ghost model proved very successful with 158 vehicles sold worldwide.

Sales of its branded Motorcycles rose 20.9%, while in Financial Services pre-tax profits rose to €222m in the first quarter, compared with €72m in 2009.