German high-end carmaker BMW on Thursday reported slumping second-quarter profits, with pricey investment in electric cars sapping the bottom line, but it remained confident of hitting targets.
Net profit at BMW fell 28,7% compared with a year earlier in the April-June period to €1,5-billion ($1,7-billion).
Chief executive Harald Krueger said the Munich-based group was investing in the development of all-electric, hybrid and fuel cell vehicles, as well as upgrading traditional internal combustion engines.
BMW reported increased demand for its i3 compact car and pointed to five all-electric models slated for release over the coming two years.
An all-electric variant of the Mini is set to begin rolling off its Oxford, UK production line in November.
The broad development front meant “substantial upfront expenditure was again necessary,” BMW said, amounting to €1,4 billion over the three months.
Sales increased 2,9%, to €25,7-billion, but operating, or underlying profit fell 28.4% to €2 billion.
BMW highlighted that it had managed to increase unit sales in the first half, climbing 0,8% to more than 1,2million units, pushing back against a global auto market predicted to contract over 2019.
Looking ahead to the full year, the firm confirmed its outlook for a “slight increase in the number of deliveries”.
After setting aside a provision of €1,4 billion for an antitrust probe underway at the European Commission, BMW expects an operating margin of 4,5 to 6,5% — down from 10,1% in 2018.