BMW Posts $73.7 Million First Quarter Operating Loss
Due to sinking sales in the luxury car market, BMW has posted an operating loss of €55 million euros or $73.7 million in the first quarter of 2009. As a result, the automaker is unable to deliver a reliable earnings forecast for the remainder of the year.
BMW CEO Norbert Reithofer told reporters that there have been no signs that the market will recover before next year. BMW hopes to resume its target sales by 2012. By that time, new versions of the 1-, 3-, and 5-series model lines will be on sale.
With production down a third, inventories have fallen. However, sales volumes have only declined by a fifth, allowing the BMW group to earn €220 million ($293 million) in free cash flow from its car program.
The outlook isn’t any better for BMW’s rivals. Last week Mercedes-Benz posted a quarterly operating loss of €1.12 billion ($1.49 billion), while Audi saw profit fall to €363 million ($483 million). Meanwhile, Porsche is still struggling to find a solution to its plans for a high-risk takeover of Volkswagen.
According to BWM, this year will be a transition year. The company is presently more focused on securing its independence rather than meeting earnings targets. BMW says it expects to miss its 1.8-million-unit sales goal for 2012, but it will sell more than 1.6 million units, enabling it to reach profitability targets for that year.
Source: Automotive News