FRANKFURT -- BMW stuck to its outlook even as second-quarter earnings fell 20 percent, hit by currency headwinds and the rising cost of manufacturing electric and hybrid cars to help the automaker meet stricter emissions limits.
The company said its earnings before interest and taxes (EBIT) fell to 2.2 billion euros ($2.4 billion) in the quarter as stricter EU CO2 legislation that starts to take effect next year forces automakers to invest to build lower-emissions vehicles.
Investments in property, plants and equipment rose 39 percent in the quarter as BMW retooled factories to build new models and more flexible production lines to make both electric and combustion-engine vehicles, the carmaker said.
The Munich-based company said the operating margin at its automotive division fell to 6.5 percent from 8.6 percent a year earlier, despite a 1.5 percent rise in vehicle sales during the same period.
BMW reiterated it expects a significant decrease in group profit before tax in 2019 as well as a slight increase in vehicle deliveries, and an EBIT margin of between 4.5 percent to 6.5 percent in the automotive division.
Rival Daimler lowered its outlook, while peers Fiat Chrysler and Volkswagen stuck to their guidance for 2019, as a global trade war hits consumer confidence and contributes to falling demand, particularly in China.