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BMW expects profits and sales to rise this year in spite of a US car market that has peaked and expectations of slowing growth in its European heartland.

The company said it forecast “slight increases” for sales volumes and revenues in its automotive automotive business, and in group profit before tax.

The German premium group, which also owns Mini and Rolls-Royce, is embarking on a two-year model offensive including more electric cars and a refreshed range of some of its core saloon and SUV models.

This will help drive increased sales at a time when established markets are slowing or going into reverse.

Although the market in Europe remains strong – to the surprise of many in the industry – the US car market is declining faster than expected after peaking last year.

European car sales in the first three months of the year rose 8.4 per cent, though the growth rate is widely expected to slow as the year goes on.

US sales by five of the top six major automakers in April fell by more than had been expected, dragging down the annual rolling 12-month sales figure – called the “saar” – to 16.9m, compared to expectations of 17.1m.

Sales of the BMW brand in the US fell 9.3 per cent in April.

Two weeks ago BMW reported that global car sales across its three brands in the first quarter rose 5.3 per cent to a record 587,237 vehicles in the first quarter, with profit before tax rising by 27 per cent to €3bn. The figures were released early because they were much stronger than expected, due to German company rules.

The rise was driven by increased valuation of the mapping company Here, which lifted profits by €183m.

Margins in its automotive business actually fell from 9.4 per cent to 9.0 per cent, though this remains within the company’s guidance range of 8-10 per cent.

Copyright The Financial Times Limited 2017. All rights reserved.
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