Profits down at BMW despite turnover increase

BMW’s Irish operation has reported a 40 per cent fall in operating profits for 2012 despite increasing both its turnover and market share during the year.

According to accounts for BMW Automotive Ireland, the national distributor for the premium brand, operating profits fell from €3.4 million in 2011 to just over €2 million last year. However turnover increased by €5.2 million to €111.1 million last year. An increase in the cost of sales of €6 million was the major contributor to the fall in profits.

There was good news for the firm in terms of market share, which rose by 2 per cent for BMW and 6.5 per cent for its Mini brand. This was at a time when the overall new car passenger market fell 11.5 per cent to 79,498.

According to figures from the Society of the Irish Motor Industry, 3,393 new BMWs were registered during the year along with 443 new Minis. The relative stability in the premium car market, compared to mainstream brands, was evident in the fact that its 5-Series range comprised 1,658 of its sales, making it the 15th most popular car sold in 2012, ahead of the Opel Astra and Ford Mondeo that year.

In the annual report the directors’ state: “With the outlook for the Irish economy still fragile, a return to more sustainable industry volumes in the short term is unlikely, meaning that financial and economic challenges will remain in the industry for the next few years.”

The firm reduced its stock of vehicles from €33.1 million in 2011 to €23.8 million by the end of last year.

Annual payment to directors were €281,000, up €14,000 on the previous year.

The firm had 19 employees and the Irish operation paid a dividend of €3.5 million last year.