BMW profits slide despite better sales

German car giant BMW said Friday its third quarter net profit slipped 7.7 percent year-on-year despite improved sales, as interest rate hedges hurt earnings.

Net profit for the three months ending September stood at 2.9 billion euros ($3.1 billion) as “fair value assessment in interest rate hedging transactions” trimmed the bottom line.

Revenues for the third quarter meanwhile rose 3.4 percent to 38.46 billion euros compared to the same period last year.

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BMW chairman Oliver Zipse said the result “puts us right on track to meet the higher targets we set ourselves in August”.

Growth in car deliveries reached 5.8 percent, said the group, which manufactures vehicles of the eponymous BMW brand, as well as Mini and Rolls-Royce.

The bump was led by Europe where 12.9 percent more vehicles were sold and in BMW’s home market Germany, where deliveries were up 12.4 percent.

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In crucial market China however, deliveries were down 1.8 percent.

As Chinese automakers ramp up their own production, particularly with lower-priced electric cars, BMW as well as its German competitors Volkswagen and Mercedes are feeling the pressure.

Nevertheless, BMW said it was sticking to its targets for the year, as it forecast Europe and the United States to “grow robustly in 2023”.