BMW Motorrad, the motorcycle segment of BMW, experienced a 5.3% decline in bikes sales in the second quarter of 2018, the company reported during its second-quarter earnings call.
Motorcycle revenue for the German OEM dropped to $762 million from $805 million the same time the year prior — a 5.3% decline.
The drop in the motorcycle segment was driven primarily by “the ramp-ups for various model changes,” Nicolas Peter, chief financial officer of BMW, said on the call. BMW took more time than usual to develop the production of new bikes as it retools its offerings for a series of models set to launch by yearend. However, for second-quarter results, that meant there were fewer bikes for dealerships to sell.
This is reflected in a 3.1% decline in bikes sold worldwide, which dropped to 51,117 units. However, despite the decline, BMW Motorrad’s earnings before interest and tax margin was 14.9%, down just 10 basis points from the second quarter of 2017. The company expects that margin will continue to drop, but more vehicles will be sold.
“In the motorcycles segment, bolstered by new products, we expect to see a slight increase in deliveries, with an EBIT margin in the range of 8% to 10%,” Peter said.
While BMW does not break down its financial services between motorcycle and auto segments, the motorcycle rollback does not appear to have affected the in-house captive. The total portfolio has increased by 2.3% to more than 5.5 million retail contracts. Additionally, the financing unit originated a total of 480,303 new credit financing and leasing contracts during the second quarter.