2. Operating efficiency
2. Operating efficiency
Defying forecasts that its small scale doomed it to substandard financial performance, BMW has been performing at a profitability level among the world's best. Last year's margin (before interest and taxes) was 11.8%, while Mercedes managed only 9%. All those white-coated technicians you see in Mercedes commercials are weighing on the bottom line. The automaker is, in effect, paying more people to make fewer cars. Going forward, Mercedes wants to improve to a 10% margin, but it only managed 8.4% in the first quarter of 2012.

Advantage: BMW

By Alex Taylor III, senior editor-at-large @FortuneMagazine - Last updated July 12 2012: 9:17 AM ET
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