BMW Profits Drop 63%

Will cut production by 40,000 units this year

BMW said on Nov.4 that it could no longer give a forecast for 2008, after it was hit head-on by the international financial crisis. The Munich-based group said it would have to take additional charges of 1.3 billion euros (US$1.64 billion) in the third quarter, and that it would cut production by an additional 40,000 units this year.

Third quarter sales fell by 8.6% to 12.6 billion euros, while net profit plunged by 63% to 298 million euros.

BMW said that many factors had hit its results, including consumer reticence in its main markets, the weak state of used car markets that affected leasing operations, and increasing financing costs. "Taking all of these factors into consideration, the BMW group estimates that it will no longer surpass the previous year's record sales volume figure in its automobile business," the company said.

The group sold 349,098 of its BMW, MINI and Rolls-Royce cars between July and September, a fall of 4.2%.

It also sold 24,818 motorcycles, an increase of 5.4%, though "market conditions for the motorcycle business were also difficult."

In the nine months since January, BMW said it had sold 1,113,972 automobiles, a slight increase of 1.7%.

In the United States, BMW's largest market, "private consumption and consumer confidence have dipped perceptibly," the statement said.

BMW's nine-month net profit fell by 39.7% to 1.292 billion euros.

Copyright Agence France-Presse, 2008

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