FRANKFURT (Reuters) - German luxury car maker BMW AG (BMWG.DE) said it was on track to hit record vehicle sales and pretax profit in 2014 after strong sales in China helped it to post a 2.6 percent rise in first quarter operating profit as forecast.
BMW is investing to expand production capacity and its model range to retain the crown of biggest selling luxury carmaker ahead of Audi and Mercedes. That spending dented earnings before interest and tax, which came in at 2.09 billion euros, just above the 2.05 billion euros ($2.83 billion) average forecast in a Reuters poll.
Shares in BMW were indicated up 0.9 percent, compared to an expected 0.4 percent opening rise on Germany's blue-chip DAX .GDAXI index.
BMW’s automotive EBIT margin, the best gauge to compare profitability with peers, was 9.5 percent in the quarter, higher than the 7 percent achieved by rival Mercedes-Benz Cars but short of the 10.1 percent achieved by Audi.
Group vehicle sales of BMW, Mini and Rolls-Royce cars were up 8.7 percent in the quarter, a new record, helped by a 25 percent jump in sales in China.
In Europe sales climbed 3.4 percent, even as sales in Germany fell 1.4 percent and U.S. sales edged up 2.7 percent, compared with the first quarter of 2013.
BMW-branded car sales were up 12.1 percent driven by demand for the X1,X3 and X5 offroaders and its 3-series sedan. That helped to offset a 12.5 percent fall in sales at Mini as the company prepared to launch a new version of the brand’s core model.
Munich-based BMW reiterated its aim to achieve a significant rise in sales volume in 2014 to 2 million cars or more - after it delivered a record 1.96 million Mini, Rolls Royce and BMW cars in 2013 - but cautioned that political and economic uncertainty may impact sales in Europe.
BMW Group also reiterated its forecast of a significant rise in group profit before tax to compared with the previous year’s figure of 7.91 billion euros.
But it added that the pace at which earnings increase would be influenced by high levels of expenditure for new technologies, fierce competition and rising personnel expenses.
Reporting by Edward Taylor; Editing by Sophie Walker