BMW sees car division profits stall as Europe weighs

BMW logo BMW has seen profit drop in its key car division

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Luxury German carmaker BMW has seen profits drop in its key car division, because of weak European markets and costly investment in new technologies.

Pre-tax profit at the unit fell 4.1% to 1.6bn euros (£1.3bn) in the three months to September, although overall group net profit rose 3.2% to 1.3bn euros.

However, the firm, which also makes the Mini and Rolls-Royce brands, said car sales in the period rose 10.7% to a new record of 481,657 units.

It said Europe remained "challenging".

"Reported figures for both the third quarter and the nine-month period have developed positively, despite the higher level of expenditure on new technologies and a challenging market environment in Europe," said Norbert Reithofer, chairman of the BMW management board.

Mr Reithofer said BMW still expected sales volume to grow by a single-digit percentage point and pre-tax profit to be similar to last year's.

"We expect further sales volume growth for the fourth quarter, even though it is clear that we - and indeed the sector as a whole - are likely to be confronted with adverse business conditions," added Mr Reithofer.

The carmaker said its BMW3 Series was one of the biggest drivers of its growth, with nine-month sales of the car up by 27.6%.

For the three months to the end of September, worldwide sales of Minis rose by 5.8% to 75,482 units and sales of Rolls-Royce motor cars were up by 13.6% to 825 units.

Geographically, Asia was the biggest driver of growth, with sales up 24.5% in the third quarter. In the Americas region, sales rose by 15.9%, but in Europe they increased by just 1%.

Shares in BMW fell 3.2% in trading.

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