It reported a record profit margin, but BMW still wasn't as profitable as its rival Audi. According to a report in Automotive News, BMW booked an 11.8-percent profit margin, up from eight percent last year. Audi, however, managed 12.1 percent.

Both figures were calculated using the earnings before interest and tax method (EBIT).

Audi and BMW have had a blossoming rivalry since Audi began directly targeting BMW, both in the development of its products and in its advertising. The two ultra-competitive German luxury brands most famously clashed in a series of billboard ads in Southern California.

Analysts had forecast an 11.9-percent profit margin for BMW, according to AN. Despite this "mild disappointment," as one analyst called it, BMW still led Audi and Mercedes-Benz as the top-selling luxury brand in 2011.

The company expects to set another annual sales record this year, besting the 1.67 million units it moved in 2011, thanks largely to it's new-for-2012 F30 3-Series.


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    • 1 Second Ago
  • 48 Comments
      larshafner
      • 2 Years Ago
      the bottom line is that both are doing incredibly well. i don`t care who sells a few cars more or who earns a few pennies more. it´s really not what matters!
      Rick
      • 2 Years Ago
      Personally, and this is not a BMW only situation, I feel the cost of their cars is disproportional to their content. That to me spells profit margin just as mentioned below.
      aatbloke1967
      • 2 Years Ago
      There's much to be looked at before making an accurate comparison. How much of that profit differential pertains to COGS? If it's a lot, then that could be explained by differences in margins eaten by sales incentives. There may also be a difference in direct R&D amortisation charges because Audi is part of a group which shares componentry, but that's likely to be offset by intercompany charges. What isn't known here is to how much profit is being eroded due to the companies' gearing on their respective balance sheets or how much of their fixed asset write-down policies, since the comparison was done using EBIT and not EBITDA. So, it's impossible to make any accurate judgement in this comparison without knowing gross profit and EBITDA as well.
        AMG THIS
        • 2 Years Ago
        @aatbloke1967
        EBITDA = Earnings Before Interest, Taxes, Depreciation and Amortization. The associated costs with properly running a car company will soon not allow companies like BMW or Mercedes to make money. The future is what VW Group is doing and what Fiat/Chrysler Group is in the process of doing by sharing costs and platforms along a slew of brands and models. Its funny watching BMW and Merc scramble now that they know this too, pile this on top of the CAFE standards and it gets REAL interesting for these 1 brand wonders.
          AMG THIS
          • 2 Years Ago
          @AMG THIS
          BMW is scrambling to expand MINI, come out with the i-brand and now there is also talks that they are bringing Triumph back. Maybe their approach is that those 3 brands can feed off each other and allow BMW to continue to do its own thing. However, BMW as a brand will eventually need to partner with someone in the next 10 years. You can't deny the 3,5,7 series could all be shared with Merc C,E,S class platforms. It would be sacriledge but viable...The Merc ML/GL SUV is on the Jeep WK2 platform and likely will continue to be for future generations, you might see more cross Company platform sharing like that in the future.
      Avinash Machado
      • 2 Years Ago
      What about Mercedes?
      Zoom
      • 2 Years Ago
      BMWs are for those that like to actually drive (though the new 5 is showing that BMW doesn't seem to think that any longer), while Audis are more 'stylish', albeit conservative. I prefer to drive.
        genelamont
        • 2 Years Ago
        @Zoom
        BMWs are for rich chicks, not knowledgable car people.
        1STH
        • 2 Years Ago
        @Zoom
        ha....seems you're 10 years behind. i've driven all sorts of Audis and BMWs....and there's not that much between them. the R8 will basically kill ANY BMW....well.....ever produced....and when it comes down to stuff like the 335 vs. the S4, the S4 is much quicker around a track....and MUCH nicer to drive in the real world. What you're describing is the 'magazine syndrome'.....you've read a lot of articles, are biased by sponsored reviews, however lack the real world experience to describe anything more than 'cliche'
          Julle85
          • 2 Years Ago
          @1STH
          Damn, why Ak74s repley doesent works @Ak74 That is bullshit. Audi R8 beats M3 in every way possible ;) http://fastestlaps.com/comparisons/audi_r8_42_fsi_quattro-vs-bmw_m3_e92.html
        Nathan
        • 2 Years Ago
        @Zoom
        Is that why the new M5 and M6 play pre-recorded engine noise through the stereo? Ah yes, the sign of a true driver's car.
          Clinton
          • 2 Years Ago
          @Nathan
          Sound engineering is nothing new. Whether is is playing with sound isolating material, firewall, or a flap in the exhaust. In fact, that only shows BMW's sophistication in making a more complete car.
      AMG THIS
      • 2 Years Ago
      This is a surprise? VW Group has a slew of brands and models to spread costs with. BMW has.....BMW.
        Julle85
        • 2 Years Ago
        @AMG THIS
        No, its Audi vs BMW marketing, wich one is better, and Audi is now better.
        leo
        • 2 Years Ago
        @AMG THIS
        i second that airbag control modules, crumble zones, sensors, abs, vsc, screws and bolts, and I could go on how many things Audi can share with VW. which goes to show how good BMW has done
          John G
          • 2 Years Ago
          @leo
          You would be surprised how many components Audi and BMW share. Not everything is made in house. Bosch make a huge amount of components for European vehicles.
        kcroc10077
        • 2 Years Ago
        @AMG THIS
        Not much but Mini and Rolls.
      You guy
      • 2 Years Ago
      If that's all Audi could manage, and with BMW having no lower-rung cars to ape parts from, BMW wins the contest.
      judgesmails
      • 2 Years Ago
      It's not a "blossoming rivalry". BMW has hated Audi since forever - they won't even say the name, just make a little scribble to denote the Audi symbol. BMW feels that Audi copied the 3-series, even though Audi refused to go to the RWD platform. I think at this point, BMW takes more from Audi than vice versa. 2.0T anyone?
        Clinton
        • 2 Years Ago
        @judgesmails
        Costs prohibited Audi to goto RWD. Most Audi's are based on FWD platforms. That is why the motors are transversely mounted. A typical Audi is 57% nose heavy. The center of the engine is mounted right over the front axle. Audi makes FWD or AWD is not because they think it is better, it is because that's what they have to work with, given VW chassis, and it would cost too much to develop their own RWD platforms. Matter of fact that, Audi doesn't have much that are developed in house. Audi's successful race car technolgies are rarely found on their street cars. Versus Porsche or BMW's racing technogies can be found trickling down to their street cars. A 911 GT3 street and a GT3 cup car, or a RLL M3 GT vs a M3 GTS. An Audi DTM car has nothing in common with a A4 purchased by conusmers. Audi models their business after MB and BMW more so than the other way around, like you thought. It has been that way for 40yrs. Audi is much more of a marketing driven brand than BMW, which still is heavily driven by engineering.
          Shaglounge
          • 2 Years Ago
          @Clinton
          Audi engines are mounted longitudinally, not transversely
          judgesmails
          • 2 Years Ago
          @Clinton
          Audi quattro models do not have transversely mounted engines. Only FWD models or the odd Haldex systems like in the new A3 are transverse. All other models are longitudinal. BMW know-it-alls are clueless. Also, they use the AWD drives platform for mileage benefits, and because that's their brand identity, not because they can't make a RWD car. No doubt Audi has marketed their cars to compete with the MB and BMW models over the last 40 years, but they did not copy their design, and it looks a lot like Audi is winning that battle.
          John G
          • 2 Years Ago
          @Clinton
          Complete and utter bull. No Audi is restricted to FWD, if they can fit AWD then its possible to adapt it to RWD. The A4 and up are their own separate platforms from the rest of VW and all allow longitudinal engines like the V8s currently used in the RS5 and future RS4. Audi has far more independent R&D than you think and their racing technology does find its way into road cars. Quattro started off in the WRC cars, FSi started in Le Mans and even their Aluminium space frame technology has racing origins. You definitely wont find any shared components in the new 3 series and its DTM version (All DTM cars run a standard carbon tub this season). One example of how bad you understand Audi is their R8 racing program. A car designed for the road using technology from the Le Mans of the same name is now becoming one of the most successful GT cars in a long time. That is Audi's racing knowledge coming full circle.
          kcroc10077
          • 2 Years Ago
          @Clinton
          So you really think that Audi, who does AWD arguably better than anyone on the planet, would be cost pronibited from producing RWD vehicles? Think about that.
          leo
          • 2 Years Ago
          @Clinton
          That's all Audi is missing the RWD aspect the driving dynamics and fun you can have with a RWD just don't compare I think lately Audi is starting to pay attention to the weight issue, and they are getting better, but no RWD no sale...........that's the bottom line for me
      bmw_sucks
      • 2 Years Ago
      Wow. Given their prices, I thought their profit margin would be much higher, like in the 30s or 40s. BMW sells it's cars for at least 20-30% more than comparable competitors, and they still can't many anything durable. I bet they have some very inept people at the top.
        Kyle Potter
        • 2 Years Ago
        @bmw_sucks
        actually...having those kinds of profit margins are near to impossible. Even Apple, arguably one of the highest performing companies in the world, has a profit margin of 31% according to their 2011 earnings. The fact that BMWs are expensive have nothing to do with how much profits they make...This is something that frustrates me. People think, "CAPITALIST PIGS!!!! They're ******* us dry!", when in reality, they're probably sweating over covering their costs. BMWs are great cars; I've found that parts put into "comparable cars" (AKA Audis") are of a significantly lower quality.
          sirmonkey
          • 2 Years Ago
          @Kyle Potter
          You should visit your local BMW dealer, but don't walk in the front door. Walk about back to the garage, and talk to the techs. Ask them about the bent cranks, wallnut shells, and most importantly ask for there best stories on control modules. my favorite is the car in limp mode, abs+airbag+check engine light because a guy hooked a u-hual trailer up, and it was hooked up correctly.
        aatbloke1967
        • 2 Years Ago
        @bmw_sucks
        "Wow. Given their prices, I thought their profit margin would be much higher, like in the 30s or 40s." Gross margins aren't being compared, only EBIT. So you don't know what overhead is being thrown into the mix in each case. All it takes is a single legal fee reserve due to a serious accident and that could easily make a difference of 0.03% of EBIT.
        kcroc10077
        • 2 Years Ago
        @bmw_sucks
        If you think those re slim margins care to guess what percentage your local grocer is pulling down?
      Ak74
      • 2 Years Ago
      This is so stupid they comparing to previous years. Just looks at units sold and it's gonna be clear that Audi is far away from BMW.
      MyerShift
      • 2 Years Ago
      Audi threatened to become sportier and more profitable than BMW some time ago!
      ALafya
      • 2 Years Ago
      Profit margins = their cars are too expensive. An opportunity for the competition to sell cars as good for less. Only, perhaps, they are not able to.
        aatbloke1967
        • 2 Years Ago
        @ALafya
        "Profit margins = their cars are too expensive." Absolute bollocks. The primary objective of any business is to make a profit. As such, you need margins on the products you sell. Where do these Autoblog posters get dug up from?
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