BMW posts higher profit as Chinese demand offsets European decline

BMW Group posted a 3.5 per cent gain in 2012 profit with rising demand for the new 3-series sedan in China and the US more than making up for a market downturn in Europe.

Earnings before interest and taxes were up at € 8.3 billion ($10.7 billion) from €8.02 billion a year earlier, the company said in a statement today.

Sales rose 12 per cent to €76.8 bn.

The maker of BMW, Mini and Rolls-Royce brand vehicles was tapping rising demand in China and the US as it sought to shield itself from the effects of the sovereign-debt crisis on Europe's car market, which hit a 17-year low last year.

BMW was also working to defend its No 1 position in luxury car sales, from which Volkswagen AG's Audi and Daimler AG's Mercedes-Benz had vowed to dislodge.

"We are again targeting further sales volume growth worldwide in 2013 and hence a new record level for deliveries," CEO Norbert Reithofer said in the statement. "However, economic conditions are likely to remain challenging in many markets."

BMW had hired Peter Schwarzenbauer, the former Audi sales chief, in its bid to tighten its grip on the top spot in the premium segment. Starting 1 April he would be the board member in charge of Mini, Rolls-Royce, BMW motorcycles and group aftersales.

''The past year has been the most successful year in BMW group's corporate history with new high levels achieved for sales volume, revenues and group earnings,'' Reithofer said.

''We have achieved or surpassed all of our targets for 2012 in the face of very challenging market conditions.''

In January, the company had announced having achieved a new sales record in 2012, confirming in its annual results statement yesterday that it sold 1.84 million vehicles last year, an increase of 10.6 per cent over 2011.

''We are again targeting further sales volume growth worldwide in 2013 and hence a new record level for deliveries,'' Reithofer said.

Buoyed by the results, BMW group said it would propose increasing the dividend to €2.50 per share from €2.30 for 2011.

Investors, though were left less than impressed, with BMW shares on the Frankfurt stock exchange down by 1.12 per cent to 70.47 euros at 1058 GMT.