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BMW accelerates ahead of German rival

BMW has outpaced rival Mercedes-Benz with a higher-than-expected 14.5% increase in second quarter profits and by reconfirming its forecast of record earnings for the full year.

Profit on ordinary activities rose to €1.1bn (£71m) in the three months to June, the Munich-base company said, while revenues were up 16% at €11.9bn (£7.85bn).

Helmut Panke, chief executive, says: “We remain confident that we will be able to record further sales volume increases for all brands and achieve new record figures for revenues and earnings for the full year.”

BMW’s results follow DaimlerChrysler’s last week, which showed an 18% drop in operating profits at Mercedes Car. DaimlerChrysler said it expected earnings at the division for the full year to be lower than in 2003 due to changes in the model mix, exchange rate effects and increased start up costs for new products.

Mercedes had also invested in a “quality offensive” to secure its reputation as premium brand.

BMW also overtook Mercedes in global sales in the first half of the year.

Second quarter operating profits growth at BMW was strongest in its automobiles division, rising 26.4% to €971m (£641m) but financial services saw a 15.3% increase to €136m (£90m).

Motorcycles dropped 24% to €44m (£29m).

Total BMW brand car deliveries were up 14.3% at 273,429 with the strongest growth, of 46.9%, for the 5-series. Deliveries of its Mini brand cars were up 7.6% at 47,402.


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