BMW aims to extend lead as sales soar
BMW posted record car sales for 2011 yesterday and forecast that a boom in luxury cars would keep it ahead of rivals this year as the biggest maker of premium cars enjoys strong demand from China and the US.
The Munich-based company said global sales of BMW, Mini and Rolls-royce cars rose by 14.2 percent to 1.67 million units last year as it sold more X3 sport utility vehicles, 5 Series models and Mini cars.
Appetite for BMW’S ultraluxury cars reached a new high, with annual sales of Rolls-royce vehicles in 2011 rising to the highest level in the company’s 107-year history, jumping almost 31 percent to 3 538 cars.
Finance chief Friedrich Eichiner said last week that he expected the global market for premium cars to grow more than 8 percent this year, more than twice as fast as the overall car market, which should work in favour of BMW.
Volkswagen said last week that 2011 sales of luxury Bentley cars rose 37 percent to 7 003 units after recording the brand’s second-highest sales volume ever in December.
Credit Suisse analyst Arndt Ellinghorst raised his target price on BMW shares to 76 (R787) from 72, saying he expected premium car makers to come out ahead this year as the gap between the strong and the weak widened further.
“Globalisation of demand and the emergence of wealth in emerging markets have widened the gap between global players with strong brand equity and weak domestically-dependent brands,” Ellinghorst said in a note yesterday.
BMW’S biggest single market is the US, where it sells about 18 percent of its vehicles. It is followed by Germany and China, accounting for 17.8 percent and almost 14 percent, respectively.
BMW said the rate of sales growth slowed to 11.9 percent in December.
The shares were up 1.6 percent at 56.44 by midday in Frankfurt, making them the biggest gainer on the German blue-chip index and outperforming the Stoxx Europe 600 Automobiles & Parts index, which was up 0.4 percent.
BMW chief executive Norbert Reithofer said in an earlier newspaper interview that he was “very optimistic about the US market’s growth prospects”, after the German car maker’s American sales grew by almost 15 percent in 2011.
Reithofer told The Wall Street Journal that he expected vehicle sales growth to be fastest in the second half of the year thanks to the market launch of the new BMW 3 Series next month.
One in three BMWS sold is a 3 Series, and the new car is crucial for BMW to fend off German rivals Mercedes-benz and Audi, the premium brand of Volkswagen.
Reithofer’s comments came as the Detroit Auto Show opened yesterday, where car makers were showing off upcoming models such as Cadillac’s ATS, with which General Motors is squarely targeting BMW’S 3 Series.
BMW grabbed the top spot in the US luxury car market last year, edging out Toyota’s Lexus and Daimler’s Mercedes-benz.
Reithofer said he expected BMW to grow faster than the overall market this year, after entering the new year with strong orders.
“We’re starting 2012 with a very good order book and very young model range… this should provide some momentum.”
Analysts are forecasting BMW’S 2012 revenues to rise 1.5 percent to about 69 billion, according to Reuters data, while earnings before interest and tax are pencilled in to decline by almost 14 percent to about 6.9bn, weighed down by costs for the 3 Series model changeover.
They expect BMW to have reached its target of a 2011 operating margin above 10 percent at its automotive business. BMW is due to publish 2011 results on March 13. – Reuters