Net profit at BMW fell 6 percent in the second quarter as it spent more on developing new technologies for electric, autonomous and digitally connected automobiles, the luxury carmaker said Thursday.
Profit came in at 2.08 billion euros ($2.42 billion), down from 2.22 billion in the year-earlier quarter. Revenues fell 2.9 percent to 25.02 billion euros.
The company said it spent 2.61 billion euros on research and development over the first six months of the year, up 13.6 percent from a year earlier. It also saw higher prices for raw materials. It underlined its push into electric vehicles, saying that it has sold 61,000 so far this year, an increase of 42 percent.
Global automakers are spending heavily on new technologies that are changing the ways in which people get around, including ride-hailing apps such as Uber and Lyft and car-sharing. Carmakers are trying to ward off competition from tech companies such as Waymo, which is developing autonomous vehicles.
The company said its core business of selling luxury cars remained profitable, citing strong sales of its 1-Series compact car and X1 and X5 sport-utility vehicles. Automotive profit margin, a key earnings metric, however fell from 10.1 percent to 8.6 percent. That still remains within the company's target range of 8-10 percent.
The company also took steps during the quarter to grow its business in China, agreeing to expand its joint venture with Brilliance Automotive. It has also agreed on a 50-50 joint venture with Great Wall Motor to make electric Mini compacts there.
AP
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