BMW sales rise, speed up luxury car competition
News comes the same week they celebrate their 100th birthday – celebrations all round.
Luxury carmaker BMW AG has announced a record profit year of 6.4 billion Euros for last year, a 10 percent increase from the year before. However, the outlook going forward is not as smooth as one might think, with an aging line up of models and cautious predictions for the future suggesting rivals including Mercedes and Ford could catch up the company soon.
It was revealed in a statement that, worldwide, consumers bought an impressive 6.1 percent more BMW branded vehicles last year, totalling sales of 2.24 million units. In their statement, they reveal that they saw a fourth quarter improvement in earnings and profitability, with a margin of 9.6 percent of sales from car making, up from 8.2 percent the year earlier. Though this is impressive, and any progress is surely good news in an uncertain economy, the problem with BMW at the moment is that their competitors are growing at a faster rate, whereas BMW, though not making a loss, are not meeting some of the higher expectations. BMW lost 20 percent in their shares this year; more than the 15 percent decrease in fierce competitor Daimler-owned Mercedes.
An aging production line has left BMW in a rare vulnerable position, finding itself struggling now to keep their lead in luxury car sales against rivals like Mercedes, who continue to roll out an impressive new roster of vehicles including the GT sports car, GLE Coupe crossover and compact CLA sedan. “BMW certainly knows it’s under pressure to show they can regain growth momentum, and they need to find a way to return passion to the brand,” Arndt Ellinghorst, a London-based analyst with Evercore ISI is quoted as telling Bloomberg.
Regardless of what may or may not happen in the future, CEO of BMW AG Harald Krueger, riding high on BMW’s 100th birthday fever, was keen to celebrate their good news in sales. He called the rise in sales “another set of impressive figures” and that the company “met all of our ambitious targets.”