Tuesday, April 29, 2008
BMW takes €236m hit
Credit crunch reaches the automotive sector
BMW has said it will take a €236m (£186m) hit in increased bank charges in the first quarter of 2008 due to the impact of the international credit crunch.
The manufacturer blamed slow sales in the US and said a drop in pre-owned car sales prices had reduced the revenues that could be generated on vehicles at the end of lease contracts.
It was therefore necessary, the carmaker said, to recognise a higher risk provision for lease vehicles as well as the increased level of bad debts and payment arrears.
BMW remained optimistic, however, saying it still expects to post a higher pre-tax profit in 2008. In 2007 BMW posted pre-tax profits of €3.87bn.
DATED: 29.04.08
FEED: MT
BMW has said it will take a €236m (£186m) hit in increased bank charges in the first quarter of 2008 due to the impact of the international credit crunch.
The manufacturer blamed slow sales in the US and said a drop in pre-owned car sales prices had reduced the revenues that could be generated on vehicles at the end of lease contracts.
It was therefore necessary, the carmaker said, to recognise a higher risk provision for lease vehicles as well as the increased level of bad debts and payment arrears.
BMW remained optimistic, however, saying it still expects to post a higher pre-tax profit in 2008. In 2007 BMW posted pre-tax profits of €3.87bn.
DATED: 29.04.08
FEED: MT
