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Tuesday, 7 August, 2001, 09:51 GMT 10:51 UK
BMW races ahead without Rover
A BMW 3 Series 316ti
BMW is profiting from a renewed focus on its core brand
German luxury car maker BMW unveiled strong growth in second-quarter profits, easily beating market expectations.

The firm said profits were 847m euros (526m; $747m) in the second quarter, up 62% year on year, and more than 10% ahead of analysts' forecasts.

It attributed the results to a renewed focus on its core BMW brand, after the sale of the loss-making British Rover division last year.

BMW's shares bounced by 1.3% on the news, and have now risen by nearly 50% since the beginning of last year, strongly outperforming the overall German market.

Minimum impact

Analysts were particularly cheered by the figures, because they showed that BMW's bottom line had been little affected by the costs of developing its new Mini model.

BMW's head office in Munich
BMW is confident about the sales outlook

The Mini, which BMW retained after the disposal of Rover, went on sale in the UK last month.

These expenses had been more than offset by surging sales for BMW cars.

The firm said it expected to sell 900,000 vehicles this year, compared with 822,181 in 2000.

In the United States, where car demand as a whole is slowing down, BMW sales jumped by 26% year on year in July.

The firm remains confident about the outlook in the longer term, and plans to spend 1bn euros on a new plant in the eastern German city of Leipzig.

Auto gloom

The results were a rare note of cheer in the automotive sector, which has performed poorly this year on the back of the global economic slowdown.

Rival DaimlerChrysler recently reported a big drop in second-quarter profits, thanks to troubles at its US Chrysler unit.

US giant General Motors saw its second-quarter profits drop by 74%, blaming lower domestic vehicle sales and losses from overseas operations for the fall.

And Asian car makers have been desperately seeking to cut costs this year, as sales have failed to recover strongly from the effects of the 1997-98 economic crisis.

See also:

18 Jul 01 | Business
BMW to build new German plant
11 Jul 01 | Business
MG Rover trims losses
29 Jun 01 | Business
BMW recalls 22,000 cars
19 May 01 | Business
BMW completes deal with MG Rover
10 May 01 | Business
BMW profits quadruple
27 Mar 01 | Business
BMW is over Rover
22 May 01 | Business
Ford confirms $2.1bn tyre recall
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