FRANKFURT, Germany (AP) — Luxury automaker BMW saw net profit fall 29% to 1.48 billion euros ($1.63 billion) in the second quarter from a year earlier as higher spending to develop new technologies and revamp factories weighed on the bottom line.

The company said Thursday vehicles sales and revenue increased in the April-June period and that it was sticking with its profit forecast for the year.

Sales rose 1.5% to 647,500 vehicles, helped by its BMW Brilliance joint venture in China. Revenues rose 2.9% to 25.7 billion euros ($28.37 billion).

The company spent 1.4 billion euros ($1.5 billion) on research and development in the quarter, and invested 1.2 billion euros ($1.3 billion) in new plants to modernize production and prepare for new models. It also saw higher production costs from an increasing proportion of electric vehicles.