FRANKFURT -- BMW's second-quarter operating profit fell 3 percent to 2.53 billion euros ($2.77 billion) from a year earlier as a recovery in European car demand failed to offset a sales slowdown in China.
Revenue jumped 20 percent to 23.9 billion euros, BMW said in a statement today. The automotive division's earnings declined 3.4 percent to 3.61 billion euros.
BMW said the profit fall was a "minor dip" caused by higher personnel costs, increased expenditure on new product start-ups and higher proportion of sales of lower margin compact vehicles.
The company said it still expects new records for sales and pretax profit in the full year even though earnings momentum was slowing.
BMW said global vehicle sales of BMW, Mini and Rolls-Royce cars rose 7.5 percent to a new quarterly record of 573,079 units.
The company's return on sales in its automotive division fell to 8.4 percent, down from 11.7 percent in the year-earlier period and below the 10.7 percent margin reported by rival Mercedes-Benz Cars and the 9.9 percent earned by Audi.
BMW said the sharp slowdown in Chinese demand might lead it to rethink full-year profitability goals at the automotive division. The unit’s earnings are still expected at 8 percent to 10 percent of sales, though “if conditions on the Chinese market become more challenging, we cannot rule out a possible effect” on the forecast, BMW said.