BMW has today reported flat third-quarter operating profit as a shift to selling smaller vehicles and more intense price competition in the US ate into profits from sales of its premium cars.
Despite a 7.1% rise in sales for BMW, Rolls-Royce and Mini-branded cars, the return on sales at BMW's automotive division fell to 8.5% from 9.1% a year ago.
By contrast, archrival Mercedes-Benz Cars' third-quarter operating margin was 11.4% while Audi's was 6.9% for the first nine months.
BMW said the dip in automotive profits was mainly attributable to higher personnel expenses as staff numbers rose 3.6%, and changes in the model and regional sales mix for its cars.
Customers are migrating to smaller, less profitable offroaders and BMW's volume model, the 5-series, is at the end of its lifecycle and competing with a brand new Mercedes-Benz E-class.
BMW said sales conditions in the US, a market where sales of highly profitable sport utility vehicles has been strong, had become "volatile" in the third quarter, leading sales in the Americas to fall 3.6%.
The more competitive sales environment has already forced German premium auto maker Audi to cut its sales forecast for the year and to warn that its operating margin would remain below its 8-10% target range this year.
On a group level, BMW said its third-quarter earnings before interest and taxes (EBIT) were €2.38 billion, in line with a €2.37 billion consensus estimate in a Reuters poll and little changed from €2.35 billion last year.
The group benefited from a profit boost from its financial services business and a gain from derivatives hedging.
