CANBERRA: The Australian operations of BMW have generated a 20 per cent jump in annual net profit to $56 million as sales climbed to a record $1.7 billion, with the X5 model, the Toorak Tractor, of choice in affluent Australian suburbs.
Across the entire Australian vehicle market, sports utility vehicles now represent more than one-third of all new vehicle sales and BMW attributes the strong performance of its own range of SUV vehicles, led by the X5, as one of the main drivers for the sharp rise in profits.The momentum is continuing in the early months of 2015, with official industry figures showing BMW sales across its range are up 13.8 per cent to 5854 vehicles in the three months to the end of March.
Marc Werner took over as managing director of BMW Australia in September 2014 and, in an overview accompanying the financial results just lodged with the Australian Securities and Investments Commission, said the strong results for 2014 were “largely attributed to the continued success of BMW’s X series products”.
A new X5 model helped deliver a 25 per cent rise in registrations in 2014 compared with the previous year. Net profit after tax was $55.9 million compared with $46.6 million a year earlier.Total revenue increased by 13 per cent to $1.71 billion from $1.51 billion, and profit before tax reached $77.6 million from $65.2 million. BMW Australia paid tax of $21.7 million in 2014, up from $18.6 million a year earlier.
The spotlight in Australia is increasingly on the amount of tax paid by large companies with offshore headquarters, as authorities and politicians try to more closely examine the amount of tax being paid by large players such as Google and Apple.
The BMW financial results also include a small component of motorcycle sales, where volumes were up by 16.4 per cent in an overall market down 4.5 percent. Mini is also part of the BMW stable and Mini sales were up 1.4 per cent in 2014.
A BMW Australia spokeswoman said on Tuesday that demand for the X5 luxury SUV remained strong and it was the highest-selling SUV in its category.
“It continues to increase in popularity,” she said. A two-wheel drive X5 version had been delivering strong sales with a price tag of $84,000, which includes a luxury car tax of 33 per cent that applies to the portion of the price tag of a vehicle over a threshold of $61,884.
The label Toorak Tractor, a reference to the wealthy Melbourne suburb, has become part of the language to describe sports utility vehicles that have become highly fashionable in wealthy suburbs, even though many city drivers rarely take them outside of the metropolitan area.
Traditional four-wheel-drive vehicle enthusiasts sneered at them in the early days and the label was bandied about in Canberra in the late 1990s by then federal opposition Treasury spokesman Simon Crean, during vigorous debate about proposed wholesale sales tax changes for 4WDs. A Sydney translation hasn’t quite taken off with the same relish, although the Macquarie Dictionary does refer to the term Balmain bulldozer.
The Federal Chamber of Automotive Industries said that across the market, SUV sales reached 95,221 in the first three months of 2015, with sales up 15.4 per cent compared with the same period a year ago. This represented 34 per cent of the total new-vehicle market. Two decades ago, four-wheel drives represented one in 12 new vehicle sales.
