MUNICH -- BMW's second-quarter profit climbed 7.9 percent as the automaker kept a tight hold on costs to offset a reliance on less-expensive vehicles such as the X1 compact SUV to boost sales.
Earnings before interest and tax rose to 2.73 billion euros ($3.05 billion) from 2.53 billion euros last year.
"We are growing profitably while simultaneously implementing our strategy step by step," CEO Harald Krueger said in a statement. Remaining profitable on the same scale will make it possible for BMW to "pursue our work on future technologies such as electric mobility and automated driving," he said.
Return on sales from carmaking was 9.5 percent, compared with 8.4 percent in the same quarter last year. That compares with a profit margin of 10 percent for Mercedes-Benz and 7.6 percent for Audi. BMW profitability remained above 8 percent for the 25th quarter in a row.
BMW confirmed its forecast of slight increases in deliveries and profit before tax this year, with a profit margin from carmaking between 8 percent and 10 percent.
Second-quarter sales of the BMW's three brands, BMW, Mini and Rolls-Royce, climbed by 5.7 percent to 605,534 units, a quarterly record. Revenue for the quarter rose by 4.5 percent to 25 billion euros.
The carmaker said its sales of electric vehicles rose about 87 percent in the first half, thanks to the introduction of new models. Sales of the X1 compact SUV climbed 62 percent.
Analysts cheered BMW's consistently high profits. "We find it quite remarkable that BMW is effectively the most profitable and stable German premium carmaker despite lower mix and an older fleet compared to its peers in Ingolstadt and Stuttgart," analysts at Evercore ISI said in a note, comparing BMW's performance with Audi and Mercedes.
BMW's first-half capital expenditure spending for property plant and equipment dropped to 1.04 billion euros from 1.62 billion euros a year earlier.
The average price of a BMW vehicle remained steady at 37,772 euros, as the company relied on comparatively inexpensive cars such as the X1 for growth. Momentum also remained muted for the top-of-the-line 7-series sedan that went on sale in October.
BMW is at a comparatively weaker point of its product cycle. It is preparing for next year's remake of the 5-series sedan, which competes with the Mercedes E-class sedan that went on sale in March. Another challenge has been U.S. customers’ shift toward SUVs, which has led to deeper discounts on the sedans at the core of BMW’s lineup.
BMW altered plans to boost production of models such as the X5 sport utility vehicle at its U.S. factory in Spartanburg, North Carolina, in reaction to the change in demand.
BMW lost its leading position in the world’s luxury-car market to Mercedes in the first half after its rival added a range of new models and revamped its business-focused E class. BMW has said it will focus instead on profitability as it invests in technology, such as self-driving features, to compete with new rivals including Uber Technologies and Tesla Motors.
BMW's capital expenditure for property plant and equipment in the first half of 2016 fell to 1.042 billion euros, down from 1.616 billion euros in the year-earlier period. The company did not provide quarterly figures for capital expenditure.
Reuters contributed to this report