AutoBeta(AutoBeta.net)05/07 Report--

BMW's first-quarter profit fell by $1.6 billion due to violation of anti-monopoly law

Due to the slowdown in car market sales, BMW's profit fell in the first quarter and the extra expenses made by the fine will reduce BMW's profit in the first quarter of this year by 1.6 billion.

Profit before interest and tax (EBIT) fell 78 per cent from the same period last year to 589 million euros, BMW said in a statement on Tuesday. Last month, the European Union imposed an antitrust fine of more than 1 billion euros on BMW and two other German automakers for colluding with emissions data. A 36% increase in spending on real estate and factories and equipment also weighed on profits.

In addition to the fine, BMW said in a statement that price competition in some markets and spending on new technologies have cut profits.

Deliveries of BMW, mini and Rolls-Royce cars rose 0.1 per cent to 605333 vehicles in the quarter.

The company's car division reported an operating loss for the first time in 10 years. Excluding provisions, BMW said profits in its main division fell 42 per cent to 1.1 billion euros, compared with an operating margin of 5.6 per cent in the first quarter. By contrast, profit margins on Mercedes-Benz passenger car sales fell to 6.1 per cent, down from 9 per cent a year ago and rival Volkswagen said its passenger car sales margin would be lower than its target of 6.5-7.5 per cent this year.

Analysts say BMW's competitiveness in new areas has been weak due to falling orders from factories and the introduction of new energy models from other competitors, as well as a negative increase in consumers due to later fines from exhaust. BMW's performance this year will not recover until new models are officially launched in the second half of the year and pure electric models are put into production in China.

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