BMW’s third-quarter profits grew by almost 10 per cent as the German brand became the latest luxury carmaker to benefit from a strong recovery in China.

Sales in China, BMW’s largest market, grew by more than 31 per cent in the quarter to the end of September compared with the same period in 2019. Its European sales also increased 7 per cent from a year earlier.

The rebound in demand helped BMW report a pre-tax profit of €2.5bn for the period, up from €2.25 in the same quarter last year. Two weeks ago, BMW revealed it had more than €3bn in free cash flow in the third quarter of the year, comfortably beating market expectations.

However, the manufacturer warned on Wednesday that its automotive business, which includes the Mini and Rolls-Royce brands, could still make no profit for the whole of 2020, saying it “continues to assume that demand in all key markets will be significantly reduced in light of the coronavirus pandemic”.

BMW’s global sales are still 12.5 per cent lower for the first nine months of 2020 compared with the same period in 2019.

The Munich-based group also announced that all four of its German plants would be producing battery-powered vehicles “in the foreseeable future”, as it pushes ahead with plans to put close to 5m pure electric cars on the road over the next decade.

By the end of next year, BMW, which was an electric car pioneer with its i3 model, said it would have a total of five electric cars on the market, adding the iX3, iNEXT and i4 to its line-up, alongside the i3 and Mini Cooper. 

READ ALSO  Spok Holdings: Get Paid While You Wait For Today's Storms To Pass (NASDAQ:SPOK)

“We continue to invest in the future of our group and are financing the transformation with our own resources,” said Nicolas Peter, BMW’s chief financial officer.

While BMW has ploughed more than €4bn into research and development this year, largely into electric and hybrid driving technology, the company is slashing costs, with at least 6,000 jobs set to be cut across the group.

BMW’s results come after domestic rival Daimler reported that its net profits increased by almost a fifth in the third quarter to almost €2.2bn, thanks to a strong rebound in sales of its Mercedes-Benz cars in China.

Volkswagen, which owns premium brands Audi and Porsche, also returned to profit in the three months to the end of September, after posting a loss of €1.4bn for the first six months of the year.

Via Financial Times