Luxury car sales help BMW bounce back

Published on Wednesday 5 May 2010 19:50

BMW has motored back into the black thanks to a recovery in luxury car markets, led by China.

• Rolls-Royce regional director, Asia Pacific, Colin Kelly with the Rolls-Royce Ghost during the launch in New Delhi. Picture: Getty Images

The company yesterday completed a trio of quarterly results from German car makers, following figures from Daimler and Volkswagen, that all exceeded market expectations.

BMW delivered more than 315,000 cars in the three months to March, an increase of 14 per cent. That included a record performance by the UK-based Rolls-Royce brand, which sold 279 cars, a rise of 60 per cent on a year earlier. Sales of the British-built Mini and BMW-branded motorcycles also increased.

Overall, pre-tax profit came in at 508 million (434m), following a first-quarter loss of 197m in 2009.

Vigorous cuts mean BMW's fixed-cost base is lower than that of 2005, giving it added confidence that it can achieve its full-year profitability targets despite probably selling 200,000 fewer units than planned.

The maker of models including the 1-Series sports hatch and X5 SUV argues it is better suited than rivals to benefit from the upturn, since the bulk of its high-margin model lines will be relaunched through 2012 amid resurgent markets.

This year's new 5-Series alone is expected to account for almost one fifth of BMW unit sales.

Credit Suisse analyst Arndt Ellinghorst said: "They are massively restoring pricing. Just from the latest monthly data, their discounts per unit in the US are now 31 per cent below the same level of last year – and this is even before the new 5-Series hits the US in June."

The bumper sales of Rolls-Royces during the quarter included 158 new Ghosts.