BMW says profit hikes helped by new models despite technology costs

BMW says profit hikes helped by new models despite technology costs

BMW has reported that net profit increased 11.5% from a year ago to €1.55bn in the third quarter.

The car maker said the figures were helped by a rejuvenated model line and the absence of last year’s market disruptions due to troubles with diesel vehicles.

Revenues grew 7.9% to €26.67bn and the company reaffirmed its profit targets for the year.

A key measure of profitability watched by investors, the operating margin, rose to 6.6% from 4.4% but still short of the company’s long-term goal of 8-10%.

The Munich-based company cited sharp increases in sales of its X3 and X4 sport-utility vehicles during the first nine months.

Profits rose despite higher spending on new tech such as electric cars, a key challenge in the face of ongoing upheaval in the auto industry.

Car manufacturers are being pushed to develop zero-local-emission cars to meet tougher emissions standards in the European Union and China.

The company said it expected demand for electric cars to double by 2021 over 2019 and to grow by 30% a year until 2025.

BMW earnings took a hit in the third quarter of 2018 amid market disruptions due to other auto makers failing to get diesel cars certified in time under new emissions rules, leading to price and supply distortions.

The company held its number of workers level with last year at 135,524 and said it aimed to keep the headcount unchanged this year as well, although it continues to recruit skilled workers and IT specialists to work on digitalisation and self-driving and electric vehicles.

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