BMW reports lower profit in Third Quarter

BMW reports lower profit in Third Quarter

It has been reported that Bayerische Motoren Werke (BMW) has failed to match the growth rate of Audi and Mercedes-Benz in the third quarter. BMW, a leading German automobile, motorcycle and engine manufacturing company reported a lower profit in the third quarter as the world's biggest maker of luxury vehicles battles to defend its lead.

BMW has added models like 4-Series couple and 2-Series Active Tourer to thwart plans of Audi and Mercedes. This step was taken by the automobile giant in the bid to attain No.1 position in luxury cars by the end of the decade.

BMW's auto deliveries rose 5.8% to 509,669 vehicles, which also include sales of Mini and Rolls-Royce models. On the other hand, sales of Daimler AG's Mercedes rose 9% to 431,000 vehicles on new models like the GLA compact sport-utility vehicle. Moreover, Volkswagen AG's Audi expanded with A3 sedan and delivered 429,925 cars, 7.2% more than a year ago.

Juergen Pieper, a Frankfurt-based analyst with Bankhaus Metzler, said he expect that BMW might lose some market shares next year as some models of the company have become little older.

It was found that share of BMW fell as much as 1.9% to 83.64 euros and was down 0.6% at 9:41 am in Frankfurt trading. The stock has dropped 1% this year, valuing the company at 54.2 billion euros.

BMW's earnings before interest and taxes in the third quarter rose 17% to a record for the period of 2.26 billion euros, whereas net income lessened 1.2% to 1.31 euros.

Stuart Pearson, a London-based analyst with Exane BNP Paribas, said, "The numbers were supported by a degree of overproduction in the quarter, which would have flattered earnings to a certain degree".

BMW's chief executive Norbert Reithofer assured that the company will perform well in both the third quarter and beyond. Confirming the company's outlook for the full year, Reithofer said it is expected that the company will witness a significant rise in its sales and pretax profits.

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