BMW Profits Fall Victim to U.S. Success

Washington DC March 26, 2008; The AIADA newsletter reported that however you calculate last year's most profitable premium brand, Mercedes-Benz is certain to be on top. After cutting Chrysler loose, profits at Daimler, Mercedes' parent, have shot upward like an untethered balloon.

There was a surprise in last year's results, though. Audi's profit margin topped BMW's.

BMW's comparatively bad showing demonstrates just how right CEO Norbert Reithofer has been in pursuing drastic cost reductions. In the United States, BMW has become a victim of its own success. The weak dollar most hurts the import company selling the most in the United States.

According to Automotive News, in some ways, Audi should be grateful to Ralph Weyler, its departed sales and marketing chief for neglecting the American market.

Weyler's inattention helped put Audi far behind Mercedes and BMW in U.S. sales. But as an unintended positive result, the dollar's weakness today is barely affecting the company. It makes one wonder if the folks at Audi might be secretly hoping for Americans to buy a record number of BMWs again this year, too.