China’s appetite for BMW’s boosting BMW profits
Earlier this week we reported on the Chinese premium market and Audi’s growing rivals in the segment which could potentially shrink their market share in the long term, now it seems that the proof is leaking out with BMW’s profit being boosted by the Chinese market.
From Reuters:
German premium carmaker BMW’s (BMWG.DE) third-quarter earnings surpassed expectations and outperformed rival Mercedes-Benz (DAIGn.DE), bolstered by robust growth in China and demand for its 5-Series sedan.
“The Chinese market is still strong in our segment,” Chief Financial Officer Friedrich Eichiner told journalists on a conference call on Thursday.
BMW’s third-quarter pretax profit jumped 21 percent to 1.64 billion euros ($2.26 billion), above the 1.48 billion euros average analyst estimate in a Reuters poll.
It said it still expects 2011 pretax profit to rise significantly from a year earlier, with vehicle sales rising to more than 1.6 million from just below 1.5 million.
Shares of BMW jumped 4.6 percent to 60.64 euros by 1015 GMT, outperforming the STOXX Europe 600 Automobiles & Parts .SXAP index, which was up 2.6 percent.
More than half of analysts covering BMW recommend buying the stock, which has lost 10 percent of its value over the past six months, with a mean price target of 69.37 euros, according to Thomson Reuters StarMine.
BMW sold 9 percent more automobiles in the third quarter than a year ago, driven by a 21 percent jump in China, the world’s biggest car market.
“Of course we cannot expect the high double-digit growth rates (in China) that we used to see, but we expect growth to continue next year and have no reason to believe that this will not be the case,” Eichiner said.
BMW’s biggest single market is the United States, where its quarterly sales were up 7.5 percent at almost 76,000 cars.
Bernstein analyst Max Warburton said it was impossible at this point to forecast how car sales would develop in China but said that BMW could cope with a slowdown.
“If China slows down, we can still expect BMW to make good money in the U.S. and hopefully Germany,” he said.
Tweet This
Share on Facebook
Digg This
Save to delicious
Stumble it
RSS Feed
According to the following investor presentation from May of this year, China is now the largest market for the 7-Series, X6, 5-Series sedan, and 5-Series GT.
http://www.bmwgroup.com/e/0_0_www_bmwgroup_com/investor_relations/ir_services/_pdf/BMW_Investor_Meeting_China_Presentation_CS_20110517.pdf
But who else would buy a 5 series GT?
Who would buy the X1?
Me!
I’d quite like one! All SUV’s are boring to drive, and there is a certain segment of the population that like the higher up driving position of an SUV but dont want to have a car that wallows through corners like a drunk rhino. The 2.0T X1 has the perfect mix of AWD for snow/mud (although, it will get out of its depth eventually) and RWD for the summer days when you want to gun it on country lanes. My only complaint is the X1 is too small, whilst the X3 is too big.
Im not a BMW fan, the 5-series GT was rank, the 3 and 5 are a little on the bland side at the moment when compared to the A4L and C/E series and the MINI series seems to be getting stretched very thin these days.
But the X1 isn’t any higher than other cars either. It just looks long and really narrow when you look at it. Really looks like a useless car. I would take the MINI countryman over it anyway. Drives circles around it too. Yes I know the MINI Countryman is pretty small and useless too but they are still more fun to drive and I wouldn’t have to push people out of their lanes because I was in a snobby BMW.
MINI’s appeal to some, BMW X1′s to others.
Personally I find the MINI SUV to be vile and scraping the bottom of the Mini brand.
But if you drive it, you will have to admit it is still fun to drive compared to other SUV’s. I have heard the Nissan Juke is similar but I haven’t driven it yet.
I must admit I’m a bit surprised by the success of the 5GT over here, though you’d think I’d have learned by now to not be surprised by the success of anything that is overpriced.
Anyways, wasn’t the design of the 5GT to allow European families to pack lots of luggage (in the upgright position) for their weekend getaways?
You should tell the Mitsuoka man. He was scratching his head and wondering why the Snake wasn’t selling.