BMW reported a smaller-than-expected 6 percent decline in second quarter operating profit on Thursday while brushing off concerns about new anti-pollution rules and trade tensions which caused rival Daimler to warn on profits.
Khodrocar - The German carmaker said higher spending to develop electric and autonomous cars and currency headwinds weighed on earnings before interest and taxes (EBIT), which fell to 2.74 billion euros ($3.19 billion) but topped the 2.69 billion expected by analysts.
BMW affirmed its 2018 targets, unlike Daimler which issued a profit warning in June, and rival VW, which cautioned that its margins were at risk because of problems getting its vehicles certified for new anti-pollution rules.
"This is arguably the best-run automaker. It is certainly the most stable,” Max Warburton, an analyst at Bernstein Research, said of the company’s results.
BMW said it expects capital expenditure to reach an all-time high in 2018 as it pushes zero-emissions cars and opens a battery cell competence center with expertise in developing and producing battery cells in early 2019.
"We will also be purchasing raw materials for battery cells ourselves, especially cobalt, in the future,” Chief Executive Harald Krueger told investors on a call to discuss earnings.
BMW said it will continue to offer its customers almost all of the cars in its fleet, while Mercedes-Benz and VW warned that problems certifying vehicles to the new Worldwide Harmonized Light Duty Vehicles Test Procedure (WLTP) would result in a more limited product offering, potentially damaging margins.
Volkswagen said that only 60 percent of its VW branded vehicles will conform to the WLTP emissions test standard by the end of August.
"We see some advantages when compared with our competitors,” Krueger said, explaining that waiting times for a new car were no longer than three months and that BMW’s ability to offer products could help it steal market share from rivals.
Source: Reuters
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