BMW BMWG.DE said on Wednesday third-quarter profit rose almost 10% thanks to rebounding Chinese demand for luxury cars and it reiterated its outlook, even as a wave of coronavirus infections continues to sweep Europe and the United states.
Like rival Mercedes DAIGn.DE, BMW’s quarterly pretax profit recovered in the third quarter, rising 9.6% to 2.46 billion euros ($2.87 billion), lifted by an 8.6% rise in deliveries of luxury cars.
The automotive EBIT (earnings before interest and tax) margin rebounded to 6.7%, from minus 10.4% in the second quarter and 6.6% a year earlier, despite a 50% jump in sales of lower-margin electric and hybrid cars during the same period.
BMW-branded vehicles saw a jump of 9.8% in deliveries during the quarter, mainly thanks to a 31% spike in China, which helped offset a 15.7% drop in demand in the United States, where demand was being hit by the pandemic.
BMW reiterated it expected to achieve an EBIT margin of between 0% and 3% for the automotive segment in 2020.
Despite a recovery in demand in some markets, overall deliveries of high-end vehicles as well as group pretax profit are expected to be significantly lower than last year, BMW said.
“The level of risk due to the negative impact of the pandemic is assessed as high. After a more stable phase in the economic environment in the third quarter, the pandemic is now clearly regaining momentum,” the carmaker said.
“If the pandemic takes an even more serious course and the global economy experiences a perceptible downturn, the risk exposure could be considerable, particularly on the demand side.”