BMW Hits Skids despite Strong China Growth

German luxury carmaker BMW said Wednesday its net profits had dropped sharply in the second quarter of the year despite strong sales growth in Asia, especially in China.

Net profits came to 1.28 billion euros ($1.58 billion) in the second three months of the year, BMW said, a decline of 28.1 percent on the same period in 2011.

This disappointed analysts surveyed by Dow Jones Newswires, who had forecast a drop of 24 percent to 1.4 billion euros.

Nevertheless, turnover rose by 7.3 percent to 19.2 billion euros. The firm blamed high staff costs, greater expenditure on research and "intense market conditions" for the fall in profits.

The group stuck to its full-year target of beating last year's performance in terms of pre-tax earnings and sales volume.

Sales were sluggish in crisis-hit Europe (down 0.1 percent), solid in North America (up 10.3 percent) and stellar in Asia (up 25.6 percent) driven mainly by China.

BMW sold a total of 159,358 vehicles in China, a gain of 30.6 percent. Sales were also strong in Japan, showing a 27.3-percent gain to 27,737 vehicles.

Board chairman Norbert Reithofer said the firm had continued to perform "extremely well."

We have achieved new sales volume and revenue highs as well as the second best operating profit in the company's history", he said.

BMW employs some 102,007 staff worldwide.