Bayerische Motoren Werke AG, the world’s largest maker of luxury cars, said 2006 profit rose 28% to a record after the company updated models including the X5 sport-utility vehicle and disposed of a stake in a plane-engine maker.
Net income rose to €2.87 billion ($3.8 billion) from €2.24 billion, the Munich based Bayerische Motoren Werke AG said in an e-mailed statement today. Earnings were more than the €2.77 billion estimate of analysts surveyed by Bloomberg News.
CEO Norbert Reithofer, who succeeded Helmut Panke in September, introduced new versions of the X3 and X5 SUVs and the Mini in the second half to counter models from DaimlerChrysler AG’s Mercedes-Benz including the C-Class sedan, which competes with BMW’s 3-Series. Profit was helped by the sale of a stake in aircraft-engine manufacturer Rolls-Royce Group Plc.
Shares of BMW rose as much as 68 cents, or 1.6%, to €43.18 and were up 1.4% at 11 a.m. in Frankfurt. The stock has declined 1.1% so far this year. Revenue increased 5% to €49 billion from €46.7 billion a year earlier, BMW said January 26. The carmaker will hold its annual earnings press conference March 14 at company headquarters.
BMW maintained its lead over Mercedes-Benz last year. BMW-brand sales rose 5.2% to 1.19 million vehicles, while sales of the Mini declined 6.2% to 188,072 cars as the factory making the car shifted over to a new version that went on sale in November. Sales at BMW’s Rolls-Royce luxury-car division rose 1.1% to 805 sedans.
The 3-Series is BMW’s most popular car and accounts for almost half of the company’s total vehicle sales. The car competes with the Mercedes-Benz C-Class and Volkswagen AG’s Audi A4. The newest version was introduced in 2005. BMW last year also introduced a 3-Series coupe. Profit at DaimlerChrysler’s Mercedes Car Group surged last year to €2.4 billion compared with a loss in 2005.
Sales, including those of the Smart minicar brand, rose 3% to 1.25 million vehicles. DaimlerChrysler CEO Dieter Zetsche, who also runs the Mercedes group, is completing a reorganization of the luxury division by cutting jobs and slashing production costs in order to push profit as a percentage of sales to 7% by the end of the year. In contrast, BMW’s Reithofer has said he can’t offer shareholders „a restructuring story.”
BMW has boosted vehicle sales by more than half since 2000 while keeping the size of the workforce largely unchanged, Reithofer told reporters March 6 at the Geneva motor show. The company aims to boost productivity by 5% a year. The Munich-based carmaker will introduce two all-new vehicles next year. The company expects to sell „more than” 1.4 million cars and light trucks this year. (Bloomberg)