FRANKFURT — BMW’s third-quarter profit rose almost 10 percent, boosted by rebounding Chinese demand for luxury cars.
The automaker reiterated its full-year outlook in a statement on Wednesday, even as a wave of coronavirus infections continues to sweep Europe and the United states.
BMW’s quarterly pretax profit increased 9.6 percent to 2.46 billion euros ($2.87 billion), lifted by an 8.6 percent rise in vehicle deliveries.
The automotive EBIT (earnings before interest and tax) margin rebounded to 6.7 percent from minus 10.4 percent in the second quarter and 6.6 percent a year earlier, despite a 50 percent jump in sales of lower-margin electric and hybrid cars.
BMW-branded vehicles saw a jump of 9.8 percent in deliveries, mainly thanks to a 31 percent increase in China, which accounts for almost a third of the automaker’s vehicle sales. China helped to offset a 16 percent drop in demand in the U.S., where sales were hit by the coronavirus pandemic.
The company generated revenues of 26.3 billion euros ($30.7 billion) in the quarter.
Shifts in consumer behavior sparked by the pandemic might also explain some of the recovery in deliveries, with commuters and holidaymakers spurning trains, buses and planes in favor of private cars where the risk of infection is lower.
Still, BMW warned there’s a high level of risk given that the pandemic is “clearly regaining momentum,” after countries from Germany to the U.K. and France issued renewed lockdowns that are expected to dent sales during the current quarter.
Separately, CEO Oliver Zipse warned last week that a no-deal Brexit would hurt BMW’s bottom line.
Zipse’s cost-cutting push has improved profitability, with the company saying on Oct. 20 that free cash flow from the automotive sector rose to more than 3 billion euros in the third quarter.