BMW Mulls Production Increase For Already Profitable i3

BMW says it’s considering an increase of assembly line capacity for its pending i3 electric car due to strong initial European demand – and each car will reportedly be immediately profitable.

The electric cars will go on sale in the U.S., China and Japan in the first half of next year, but in Germany sales start Nov. 16.

To date BMW has in excess of 8,000 European orders, expects to sell 10,000 next year, and is prepared to accommodate having exceeded its expectations by increasing production.

“If demand holds, which is what it’s looking like, we will soon have to invest more,” said BMW’s Chief Financial Officer Friedrich Eichiner speaking at a conference in Amsterdam yesterday.

The i3 – built from the ground up as an EV – was part of a $2.7 billion expenditure in the i series and will be followed by the i8 next year. BMW has trademarked the name rights to i1 through i9.

According to a Frankfurt-based analyst interviewed by Automotive News, BMW has already absorbed the costs for the i3 meaning its sales will be accounted as in entirely the black.

That said, the new models and increased production capacity whittled into BMW’s operating profit margin, causing it to decrease to 10 percent in the second quarter compared to 12 percent a year earlier.

“We’ll have to work very hard to keep profitability within our target corridor” said Eichiner of of 8 percent to 10 percent in the next few years. This will continue to be a challenge, he said, given a weak European market and the high costs of meeting stricter emissions for BMW’s overall vehicle line.

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