FRANKFURT, Germany (AP) — Tough auto markets worldwide — including a deep slump in Europe — and investment in new technology dented first-quarter earnings at German automaker BMW AG.
BMW's net profit fell 3 percent to 1.312 billion euros ($1.73 billion) as revenues declined 4.1 percent to 17.55 billion euros.
The earnings figures follow a quarter in which the European car market shrank 9.8 percent as many countries have sunk back into recession.
Still, the company's drop in profit for the quarter was smaller than its German competitors, Daimler AG and Volkswagen AG.
"Despite the current weakness of car markets in Europe, the BMW Group has made a good start to the new financial year 2013," CEO Norbert Reithofer said in a statement Thursday. "Despite high expenditure on new technologies and challenging market conditions worldwide, we managed to keep revenues and earnings at high levels."
The maker of the 1-series compact and the X5 sport utility noted that its overall auto profit margin of 9.9 percent, a key earnings figure, was near the top end of its 8-10 percent goal. Profit margin is what's left over from the price after the expenses of making and selling the car. The group net profit figure also beat the estimate for 1.102 billion euros among analysts surveyed by financial information provider FactSet.
Munich-based BMW said earnings would continue to be affected by higher expenses for investment in new technology and production facilities. Renewing the model line with fresh designs and the latest technology is considered key to the automaker's profitability down the road. BMW's luxury brand identity also depends in part on deploying the latest technologies such as the lightweight carbon-fiber materials used in its i3 electric compact.