FRANKFURT, March 14 (Reuters) - BMW expects rising incentive levels, particularly in southern Europe, will not result in a “huge burden” on profits at its core cars business this year compared to 2011, finance chief Friedrich Eichiner said on Wednesday.
“There is now a lot of volatility out there and we see increasing risk in specific countries,” Eichiner told analysts during a conference call.
“If this were to be isolated to Spain, Italy and southern European countries then we might be able to do better again in 2012, but if it spills over to bigger markets like the UK and Germany, it will be difficult,” he said.
Eichiner said he estimated the burden on results in the first quarter to be around 50 basis points, which a spokesman later said referred to the net decrease in revenue at the Automobiles segment as a result of higher incentives.
For the full year 2011, the company had on balance a positive effect of about 100 basis points, Eichiner said, even when including a loss of pricing power in the fourth quarter, when profitability at its core autos business fell year-on-year.
The BMW CFO added that he didn’t expect the group’s sales mix, measured in revenue per vehicle sold, to see a marked deterioration as a result of a greater portion of smaller cars sold this year like the 1-Series compact. (Reporting by Christiaan Hetzner)