BMW increased third quarter profits by 12% in the third quarter as sales grew, outperforming analysts’ expectations but dismaying some investors with development costs for new models, the Detroit News reported.

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The newspaper said BMW’s net profit rose to 433 million euros ($US433 million) from 388 million euros in the same period the year before as BMW bucked difficult conditions in the global car market.

Group sales, including BMW, Mini, motorcycles and financial services, rose 19% to 9.97 billion euros from 8.37 billion euros the year before, the Detroit News said.

According to the newspaper, BMW singled out sales in the key US market for its mainstay 5-series, which have increased this year despite a worldwide decline as the model nears the end of its life.

BMW’s strong product mix, including its mainstay premium sedan and its X5 sport utility, were key to its performance, Stefan Greifeneder, an analyst at Bayerische Landesbank, told the Detroit News.

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BMW’s net profit exceeded a consensus expectation of 428 million euros by analysts polled by Dow Jones Newswires, the Detroit News said.

Lower taxes helped the bottom line as corporate income taxes fell 35 million euros, or 12 percent, to 256 million euros, the newspaper added.

But the Detroit News noted that BMW shares traded down 6.6% at 34.25 euros after the announcement, apparently as investors reacted to the effect that spending on development of new model production placed on pretax profit margins.

For cars, the figure fell to 5.7% in the third quarter from 6.6% a year earlier, the Detroit News said.