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BMW Q3 profit rebounds on China demand for luxury cars
[FRANKFURT] BMW said on Wednesday third-quarter profit rose almost 10 per cent thanks to rebounding Chinese demand for luxury cars and it reiterated its outlook, even as a wave of coronavirus infections continues to sweep Europe and the United states.
Like rival Mercedes, BMW's quarterly pretax profit recovered in the third quarter, rising 9.6 per cent to 2.46 billion euros (S$3.92 billion), lifted by an 8.6 per cent rise in deliveries of luxury cars.
The automotive Ebit (earnings before interest and tax) margin rebounded to 6.7 per cent, from -10.4 per cent in the second quarter and 6.6 per cent a year earlier, despite a 50 per cent jump in sales of lower-margin electric and hybrid cars during the same period.
BMW-branded vehicles saw a jump of 9.8 per cent in deliveries during the quarter, mainly thanks to a 31 per cent spike in China, which helped offset a 15.7 per cent drop in demand in the United States, where demand was being hit by the pandemic.
BMW reiterated it expected to achieve an Ebit margin of between 0 per cent and 3 per cent for the automotive segment in 2020.
Despite a recovery in demand in some markets, overall deliveries of high-end vehicles as well as group pretax profit are expected to be significantly lower than last year, BMW said.
"The level of risk due to the negative impact of the pandemic is assessed as high. After a more stable phase in the economic environment in the third quarter, the pandemic is now clearly regaining momentum," the carmaker said.
"If the pandemic takes an even more serious course and the global economy experiences a perceptible downturn, the risk exposure could be considerable, particularly on the demand side."