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BMW Earning A Ton Of Money From SUVs

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Gas guzzlers sell, plain and simple.

One of the key reasons why BMW's board replaced now-former CEO Harald Krueger with Oliver Zipse last summer was because of his failure to meet sales expectations. The fact that Krueger was also late to the game with electric vehicles didn't help him either. Both Audi and Mercedes-Benz beat BMW to market with the e-tron and EQC, respectively. Expectations are understandably high for Zipse, but Reuters reports he's already off to a solid start. Ironically enough, he has Krueger to partially thank. BMW has reported a 33 percent third-quarter operating profit thanks mainly to excellent SUV sales.

Another factor that worked in the German automaker's favor last quarter was the absence of "one-off factors." These include things like a natural disaster in a key market. Partially as a result of third-quarter sales, BMW is "well on (its) way to achieving (its) targets for the year as a whole," Zipse said.

2018-2020 BMW X3 Front View BMW
2018-2020 BMW X3 Rear View BMW
2018-2020 BMW X3 Side View BMW

What's interesting is that, unlike Ford, BMW's China sales have remained solid. While the Blue Oval brand was forced to lower its sales forecast because of China, BMW is reporting the opposite. BMW passenger car sales increased by an impressive 3.6 percent last quarter, and this includes a 5.8 percent increase in China alone. The redesigned X3 played a significant role.

For the past 15 months, auto sales in China have fallen but BMW seems to be weathering the storm quite well. US sales also remain very good. Compared to the same time in 2018, BMW of North America reported a 3.3 percent increase last month. Ford, meanwhile, was down by 3.8 percent. Many analysts have concluded that North American auto sales, in general, are cooling off but are not dropping at the level China has experienced.

Off Roaders For Those That Like To Go Topless
Off Roaders For Those That Like To Go Topless
Amazing Cars Built With Help From Lotus
Amazing Cars Built With Help From Lotus
2019-2020 BMW X5 In Motion BMW
2019-2020 BMW X5 In Motion BMW
2019-2020 BMW X5 Rear Angle View BMW

With this sales momentum, led mainly by its SUVs, BMW plans to invest profits, alongside cuts made elsewhere, into re-tooling its factories to build hybrid and electric vehicles. Cutting vehicle development times by a third and the overall number of global drivetrains by half beginning in 2021 are also planned. For now, ironically enough, the X3 and gas guzzlers like the X5 and big X7 continue to fund BMW's more environmentally friendly future plans.

2019-2020 BMW X7 Front View Driving BMW
2019-2020 BMW X7 Side View BMW
2019-2020 BMW X7 Rear View BMW
2019-2020 BMW X7 Front View BMW

Gallery

2018-2020 BMW X3 Rear View
2018-2020 BMW X3 Front View
2018-2020 BMW X3 Side View
2019-2020 BMW X5 In Motion
2019-2020 BMW X5 In Motion
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