FRANKFURT: BMW, the world's biggest luxury carmaker, raised the 2010 outlook for its core auto business's profitability amid an ongoing boom in demand for luxury cars in China.
BMW said on Wednesday, Nov 3 it now sees its auto business reaching an operating margin of more than 7 percent this year, rather than the 5 percent-plus that it aimed for in August.
Analysts on average see BMW posting a 2010 margin of almost 7.4 percent, according to a Reuters poll.
"We want to increase group earnings significantly in the current year and thus take an important step towards achieving our targets for 2012," Chief Executive Norbert Reithofer said in a statement.
Much like rival luxury brand Mercedes, which increased its earnings guidance three times this year already, BMW has been surprised by the abrupt surge in demand this year.
Third-quarter earnings before interest and taxes (EBIT) at its Automobiles division rose to 1.15 billion euros ($1.60 billion), giving it a margin -- EBIT as a percentage of sales -- of 8.1 percent.
Analysts had seen on average a margin of 7.9 percent, with EBIT of 1.01 billion euros, according to the poll.
By comparison, Daimler's Mercedes posted a quarterly EBIT margin of 9.5 percent, and Audi earned an operating return of almost 11.2 percent -- a level so high analysts doubt it is sustainable.
In October, group head of sales Ian Robertson forecast volumes will grow at least 10 percent in the fourth quarter, implying 2010 sales of just over 1.44 million vehicles -- the second highest figure on record after 1.50 million in the boom year of 2007. - Reuters
BMW said on Wednesday, Nov 3 it now sees its auto business reaching an operating margin of more than 7 percent this year, rather than the 5 percent-plus that it aimed for in August.
Analysts on average see BMW posting a 2010 margin of almost 7.4 percent, according to a Reuters poll.
"We want to increase group earnings significantly in the current year and thus take an important step towards achieving our targets for 2012," Chief Executive Norbert Reithofer said in a statement.
Much like rival luxury brand Mercedes, which increased its earnings guidance three times this year already, BMW has been surprised by the abrupt surge in demand this year.
Third-quarter earnings before interest and taxes (EBIT) at its Automobiles division rose to 1.15 billion euros ($1.60 billion), giving it a margin -- EBIT as a percentage of sales -- of 8.1 percent.
Analysts had seen on average a margin of 7.9 percent, with EBIT of 1.01 billion euros, according to the poll.
By comparison, Daimler's Mercedes posted a quarterly EBIT margin of 9.5 percent, and Audi earned an operating return of almost 11.2 percent -- a level so high analysts doubt it is sustainable.
In October, group head of sales Ian Robertson forecast volumes will grow at least 10 percent in the fourth quarter, implying 2010 sales of just over 1.44 million vehicles -- the second highest figure on record after 1.50 million in the boom year of 2007. - Reuters
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