BMW’s consolidated profit fell by almost 84 percent.
What: Reuters
Problems with a braking system supplied by Continental and the persistent market weakness in China are costing Munich-based car manufacturer BMW profits.
The bottom line is that, according to Wednesday’s information, the company only earned 476 million euros, which is 83.8 percent less than a year ago. The profit margin in the car business, which is important for the company, collapsed to 2.3 percent after it had scratched the ten percent mark a year ago.
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BMW boss Oliver Zipse spoke of “extraordinary burdens in the third quarter”. Due to defects in the braking system, BMW was temporarily unable to deliver certain cars. For the fourth quarter, BMW was confident that it would be able to reduce inventories again and is sticking to the forecast for the full year that was reduced in September.
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BMW is seeing robust demand for premium vehicles in many markets, it said. Nevertheless, the number of cars sold is likely to decline, and the profit margin in the car business is likely to be six to seven percent, below the long-standing target of eight to ten percent. Despite the current weakness, BMW is sticking to its investment plans, said CFO Walter Mertl.
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BMW is focusing on the electric car business
Starting next year, the New Class electric vehicles, for which the Munich-based company has built its own factory in Debrecen, Hungary, will roll off the assembly line. BMW expects the New Class to give additional boost to the electric car business. Despite the current market downturn, the company sold a good ten percent more electric cars in the past quarter. Almost one in five BMWs now only has an electric motor.
However, overall deliveries fell, especially in China. Accordingly, operating profit in the third quarter fell by almost two thirds to almost 1.7 billion euros, and sales fell by 15.7 percent to 32.4 billion euros.
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What: Reuters
