BMW rolls to record profits on electric cars, U.S. tax cut

The Associated Press

BMW CEO Harald Krueger poses with the new M8 Gran Coupe during the press day at the 88th Geneva International Motor Show on Tuesday.

AFPBERLIN (AFP-Jiji) — German luxury carmaker BMW said Thursday its 2017 net profit soared 26 percent to a record €8.7 billion ($10.7 billion), driven by strong demand for electrified vehicles and a tax bump from the United States.

The Munich-based group said deliveries of its electrified vehicles jumped 65.6 percent to 103,080 units, as it plans to put half a million such cars on the road by the end of 2019.

The group, which also owns the Mini and Rolls-Royce brands, said automobile deliveries were up 4.1 percent to 2.46 million vehicles, while revenues rose a corresponding 4.8 percent to €98.6 billion.

The lowering of corporate tax in the United States from this year also contributed €977 million to the bottom line, the group said.

“We can look back on the most successful year in our corporate history and have achieved record levels for revenues and earnings for the eighth year in succession,” said BMW chairman Harald Krueger.

And the group is targeting another record year in 2019 as it eyes a further rise in deliveries in 2018.

“This year we are targeting another new sales record, with deliveries slightly up on the previous year,” said Krueger.

The group made no mention of concerns of fears of a trade war after U.S. President Donald Trump’s threat to slap punitive tariffs on European cars if the EU retaliated against his planned taxes on steel and aluminium imports.

But it warned that it “expects the political and economic environment to remain volatile.”

Ahead of his inauguration, Trump had also directly referred to BMW in his criticism about foreign carmakers selling millions of vehicles in the United States.

German analysts have estimated that any U.S. tariffs targeting the automobile industry could cost BMW or Volkswagen up to 10 percent of their annual profits.

BMW’s U.S. sales had fallen 3.5 percent in 2017, reaching 353,819 units, even if the group said there was a turnaround in the fourth quarter.

Germany’s powerful automobile industry has been racing to rescue its reputation after Volkswagen admitted to deliberately building software in 11 million cars worldwide to cheat on diesel emission tests.

While its cars have not been found to contain such so-called “defeat devices,” BMW was forced last month to recall thousands of vehicles for a software update after it admitted that they released more harmful emissions on the road than in the laboratory.

The group insisted that no defeat device was involved, but that a software was wrongly used in some models that were not compatible.Speech

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