F&I Management & Training

BMW has reported a significant slump in profits and can no longer give a forecast for 2008 after being hit by the economic downturn.

Third quarter net profit plummeted by 63 per cent to €298m (£240m) as sales fell 8.6 per cent to €12.6bn.

The luxury carmaker said it would have to take additional charges of €1.3bn during the quarter and that it would cut production by an additional 40,000 units this year on top of the 25,000 unit reduction already announced.

BMW blamed a number of factors for the downturn in its business including "general reticence" to spend by consumers, ongoing difficulties in the pre-owned car markets and increased bad debt risks.

It said it had previously forecast a return on sales of at least 4 per cent for the year but this was no longer feasible given the sharp deterioration in market conditions.

The carmaker added that its worldwide sales forecast would also have to be amended and would not beat last year's record levels.

DATED: 04.11.08

FEED: MT