Has hit them square between the eyes.

BMW posts hefty quarterly loss
Published: 4 Nov 08 09:52 CET
Online: http://www.thelocal.de/money/20081104-15309.html

BMW, the German luxury car maker, said on Tuesday that it could no longer give a forecast for 2008, after it was hit head-on by the international financial crisis.


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The Munich-based group said it would have to take additional charges of €1.3 billion ($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 percent to €12.6 billion, while net profit plunged by 63 percent to €298 million. BMW pointed to several factors that had slammed 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," a statement said.

Owing to the poor market climate and "uncertainties caused by the financial crisis, the profitability targets set for 2008 are no longer achievable," it added. "The likely progress of business over the coming months cannot be forecast with any exactitude. For this reason, it is not possible to predict the level of group earnings for the year, other that they will continue to remain clearly positive."

The group sold 349,098 of its BMW, MINI and Rolls-Royce cars between July and September, a fall of 4.2 percent. It also sold 24,818 motorcycles, an increase of 5.4 percent, 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 percent. In the United States, BMW's largest market, "private consumption and consumer confidence have dipped perceptibly," the statement said.

On Monday, rival Porsche said its North American sales had plunged by 39 percent in October from the same month a year earlier. BMW's nine-month net profit fell by 39.7 percent to €1.292 billion. The group said that positive effects of the economic slowdown, including easing pressure on raw material prices and a stronger dollar "are nowhere near sufficient to off-set the extremely high level of expenses" it had to bear.

"It cannot be ruled out that the risk provision for bad debts and lease financing will have to be increased again before the end of 2008," it warned.

In early trading on the Frankfurt stock exchange, BMW shares had shed 5.27 percent to €19.49, while the DAX index was off by 0.18 percent overall.

AFP (news@thelocal.de)

 

Their advertised specials are less car than an Audi for more money. I haven't heard a SINGLE person come in here since Jan 1 that told me they were getting a better deal on a BMW.

 

I think they call that the other shoe dropping LOL

 

Wow. Tim, you were right. I've been on this forum a while now and I remember you saying this.

 

But the bills DO come due and it's a praticularly bad time for those bills to be coming due for anyone.

 

I don't think Audi has anything to compare... BMW's leases were too optimistic as far as resale, you were right there. Yet, their current financing deals are much better than what Audi is offering...

 

Dealer here in town, is parking BMWs on top of each other. You can walk in and take your pick between 30 335s...Not much for being unique.

 

I agree with that, you just can say that their programs are worse... because they are not.

 

Financing incentives are a safer bet. You know what you're spending up front. Leasing can come back to bite you if you misjudge things.