BMW fetes record 2010 results, stronger Chinese ties
Record results by luxury automaker BMW highlighted the power of the German export machine Thursday as China emerged as the country's biggest market in place of traditional partner the United States.
BMW posted record revenues and net profit for 2010, in part owing to an 85.3 percent jump in sales to China, Hong Kong and Taiwan while Germany as a whole saw total exports soared 24.2 percent in January.
Germany is the world's second biggest exporter, recently overtaken by the now global powerhouse China.
UniCredit chief German economist Andreas Rees noted that "for the first time ever, German companies shipped more goods to China (including Hong Kong) than to the US," calculating their respective shares at 6.6 percent and 6.5 percent.
Rees called the shift "a turning point in German economic history" but noted that a cooling of the Chinese economy would quickly affect Germany as well.
The value of all German exports came to 78.5 billion euros ($108.7 billion) in January, the statistics office Destatis said, while imports rose 24.1 percent to 68.4 billion euros.
That produced a trade surplus of 10.1 billion euros, up from 8.1 billion euros in January 2010.
On a monthly basis however, exports fell 1.0 percent while imports were 2.3 percent higher but economists did not expect that to become a trend.
"This setback at the start of the year is unlikely to change the fact that exports will remain the major driver of the German upswing this year," said Commerzbank analyst Ulrike Rondorf.
BMW shipped 183,328 vehicles to China, Hong Kong and Taiwan last year, putting the region in third place behind Germany, with 267,160, and the United States on 266,580.
China has led emerging markets as a prime destination for German products, from autos to chemicals and machine tools used to produce finished consumer products which in turn are exported around the world.
Germany still sells most of its goods to other members of the 27-nation European Union however, with the bloc buying 48.3 billion euros worth of German exports in January.
A pick-up in the US economy, still the world's biggest, has bolstered trade with that key partner as well.
Figures provided by the German central bank showed the current account, a broad picture of trade in goods and services along with financial transfers, had a surplus of 7.2 billion euros in January.
One year earlier it stood at 5.6 billion euros.
There was particularly good news from BMW, which said its 2010 net profit was up 15-fold to a record 3.23 billion euros ($4.45 billion) from 210 million euros in 2009.
Revenues were up 19.3 percent to a record 60.48 billion euros while core earnings before interest and tax (EBIT) were more than 17 times higher at 5.09 billion euros.
"We are extremely pleased with developments over the past financial year," BMW chairman Norbert Reithofer noted in a statement, as the company forecast record sales this year again of at least 1.5 million vehicles.
"A balanced relationship in sales activities between Europe, Asia and America remains the goal," it added.
ING senior economist Carsten Brzeski noted that "'Made in Germany' remains a bestseller.
"In the coming months, this quality feature will probably be the strongest asset to weather new storms," he said.
© 2011 AFP