Unit sales rose 5 percent to 533,187 in the quarter. The BMW brand's volume was up 8 percent to 458,088, thanks to a jump in sales in China and Europe and the rollout of new models such as the 4-series coupe and the 2-series compact. Mini sales fell 10 percent to 74,028. Rolls-Royce sold 1,071 cars, up from 833 the year before.
Arndt Ellinghorst, an analyst ISI Group in London, said BMW's second-quarter profit was impressive. "The second half won't be as strong, but they'll have a stronger cash flow because they're selling all the product," he said.
Russia, new-model costs
BMW today cautioned that the crisis in Russia was starting to make itself felt. After showing little change in the first six months, regional sales fell more than 11 percent in July, Reithofer said.
CFO Friedrich Eichiner said that investments in new models and technology to cut carbon dioxide emissions will see automotive profitability eroded in the rest of the year while remaining within the target range.
BMW has quietly repositioned some of its best-selling models upmarket. The coupe and convertible version of its 3-series have been discontinued and replaced with the 4-series, commanding higher list prices.
BMW has also expanded and renewed its range of SUVs. Sales of the new X5, which hit showrooms in late 2013, rose 30 percent in the first half, the company said.
The sale of more SUVs will help offset lower profits from BMW's growing range of smaller cars such as the 2-series Active Tourer and new versions of the Mini. The proportion of smaller, lower-margin cars will rise to more than 40 percent of the group's overall vehicle sales from 25-30 percent currently, CEO Reithofer said.
In response, BMW is reining in development costs by cooperating with rivals. The group will continue pooling some component purchasing with Daimler, and a decision on whether to build a sports car with Toyota is expected to be made this year, Reithofer added.
Ahead of target
BMW aims to achieve a significant rise in group unit sales in 2014 to 2 million or more, reaching an annual sales target two years ahead of schedule, after it delivered a record 1.96 million Mini, Rolls-Royce and BMW cars in 2013.
Last year, BMW was the No. 1 global luxury brand with 1.65 million BMW branded cars sold worldwide, topping Audi at 1.57 million and Daimler in third with 1.47 million Mercedes-Benz-branded cars sold.
BMW also targets a rise in pretax profits of up to 10 percent for 2014, the company reiterated. The company is introducing 16 new or refreshed models this year to win customers and fend off efforts by Audi and Mercedes to take the global premium-car sales lead by 2020.
Both BMW and Audi have margin target ranges of 8 percent to 10 percent on an ongoing basis. Daimler CEO Dieter Zetsche is pushing for Mercedes to become the most profitable luxury-auto producer with a 10 percent margin goal.