BMW may see declining profits

BMW BMW has warned that their profits for this year are set to fall. The world’s largest luxury automotive brand make the most sales, but not necessarily making more profit.

Money gone into investments

The Euro Zone crisis has affected the car market in a highly negative manner and has finally hit BMW. Money has been spent on new models such as the new BMW 3 Series and the new i3 electric city car. The company is investing more and more on economical technology to make their vehicles a lot cleaner. It seems that BMW is going through a transitional period at present.

Growth in China

The company experienced dramatic growth in China after the financial crisis. Now they are anticipating a more steady growth in earnings.

Weathering the storm in Europe

Despite being a more expensive and premium brand, they are still performing better than European mass car makers. Their efficiency in production and strong brand name have helped to ride the storm so far of the poor European market.

Looking good for staff and production

BMW hired approximately 5,500 new staff in 2012. They are reaching their maximum capacity. European mass car makers are failing to reach their capacity in contrast, with sales reaching all time lows. Production has been cut down with plenty of plants closed and staff lost.

High profit but low growth

2013 profits are expected to be near enough the same as that which was achieved in 2012, €7.8bn. Although that doesn’t sound too bad, it will be a disappoint considering that the profit will not have increased by much year upon year.
BMW will be joined by the likes of Audi and Mercedes-Benz this year. Their German rivals are also predicting profits will remain stale this year.

25 new models

BMW is expecting to release 25 new models in 2013 and 2014. The most highly anticipated one out of them all is expected to be the new carbon fibre electric i3. The company’s unit sales increased by 11 per cent in 2012, helping figures to increase to 1.84 million. The 40 per cent increase in sales in China is not expected to be repeated.

BMW are still on target to remain as the world’s number one luxury car seller worldwide. With strong competition from Audi and Mercedes it will be extremely difficult for BMW but many believe they still have that edge.