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German automotive group BMW is expected to report sales growth but lower profits when it reports its second-quarter results. Revenue is expected to rise to €24.77 billion in the three months between April and June, compared with €23.93 billion a year earlier, according to analysts’ consensus forecasts compiled by Bloomberg. However, net profit could fall by about 8% to €1.6 billion, according to the forecasts.
BMW’s first-quarter profit dropped 2.5% as its mix of vehicles sold swung towards compact cars like the 'X1 SUV' and not the more expensive and recently revamped '7 series'. Competition is also ramping up amongst the premium car makers, with Daimler’s Mercedes and Volkswagen’s Audi openly coveting BMW’s crown as the world’s best-selling premium car brand and Tesla adding to the competition in the US. That’s putting pressure on prices in the US sedan market. The third factor weighing on BMW’s margins is the high level of investment it’s making in new technologies.
'The decisive factor for us is not short-term profit but sustainable, profitable growth,' BMW chief executive officer Harald Krueger said at the time of the first-quarter results.
Forecasts for the second quarter