BERLIN (AP) — Luxury car maker BMW AG saw its third-quarter net profit increase 3.2 percent as tax expenses declined, but the company said its performance was affected by high spending on new technology and growing competition.
The company reported Tuesday net profit of 1.33 billion euros ($1.8 billion) in the July-September period, up from 1.29 billion euros a year earlier. It said income tax expenses dropped to 659 million euros from 698 million.
The BMW Group, which includes Mini and Rolls-Royce, saw revenues decline 0.4 percent to 18.75 billion euros from 18.82 billion euros, though car sales rose 10.7 percent to 481,657 vehicles.
A closely-monitored measure of profitability, so-called earnings before interest and tax, declined 3.7 percent to 1.93 billion euros as the company spent big on new technologies and personnel costs and faced growing competition.
Chief executive Norbert Reithofer also pointed to the "challenging market environment in Europe," where weak demand in many countries, particularly those at the forefront of the region's debt crisis, has weighed on car sales.
Even so, Reithofer reaffirmed the company's full-year outlook, saying BMW expects sales volume to grow by a single-digit percentage point and pretax profit to be similar to last year's.
BMW shares dropped 3.2 percent to 80.86 euros in Frankfurt trading.