BMW increases its share in the premium car market, despite announcing a massive drop in profits.

BMW blames stiff competition and the economic crisis for a disappointing performance and a drop in profit for Q2 2009.

The German carmaker revealed a drop in profit before tax of €451 million (£383m) to €151m, and a drop in Group sales (BMW, Mini, Rolls-Royce) of 18.1% to 338,190.

It has been made to cut its workforce by 1.8% compared to December 2008, in order to alleviate financial woes.

However, on a more positive note, BMW increased its shares of the premium segment by 0.6%. The company’s financial services arm also fared slightly better, with an increase in profit before tax of €17m. 

Chairman of BMW AG, Norbert Reithofer, said: “Despite some tentative positive signals, a lasting and wide-ranging recovery is not yet in sight.”

Reithofer also reiterated the message which came out of the company’s announcement last week that it was pulling out of Formula 1: “We are pooling technical and financial resources in the areas of sustainability and the development of new technologies.

“The BMW Group is the world’s leading premium manufacturer in the automobile industry and, in our opinion, “premium” should lead by example.”

Japanese car manufacturer Toyota also revealed disappointing first quarter results today (4 August). Compared to 2008, net revenues dropped by 38.3%, and the company actually made a loss of 77.8 billion yen (£483 million).

Senior Managing Director, Takahiko Ijichi, commented on the results: “Although we were able to make certain improvements in fixed cost and cost reduction efforts, the decline in vehicle sales and the appreciation of the Japanese yen had a severe impact on our earnings.”

Car sales across Toyota’s operating regions fell by 785,000 units, with North America taking the biggest hit as sales fell by 342,000 units.