German luxury carmaker BMW has seen its profit drop in the second quarter as demand in the world’s largest auto market, China, slumped markedly. But the company said it relied on a speedy rebound there.
Earnings before interest and tax dropped by 3 percent in the second quarter year-on-year, BMW Group reported Tuesday.
The company’s net profit declined by 1.1 percent in the same period, totaling 1.75 billion euros ($1.92 billion).
The group emphasized the drop came despite a weaker euro, helping to drive a 20-percent jump in group sales to 23.9 billion euros.
Shipments of its main BMW brand cars grew by 4.9 percent, while the company said it sold almost a quarter more of its Mini cars, with sales of its luxury Rolls-Royce vehicles down 7.7 percent on the second quarter of 2014.
All eyes on China
BMW board members attributed the fall in income to a weaker Chinese market as growth in the world’s most important auto market continued slowing.
“The Chinese market is normalizing, thereby becoming increasingly competitive,” BMW said in a statement, adding that the company was well positioned to gain from a future pick-up.
“In the medium and long term, we remain utterly convinced of China’s potential for growth, given the comparatively low rate of vehicle ownership, the country’s well-developed infrastructure and the strong affinity of the fast growing middle class for brands,” BMW Chief Financial Officer Friedrich Eichiner added.
hg/cjc (AFP, dpa, AP)