BMW '08 Profits Plunge 90%
BMW is not doing so well lately. I know; it’s tough all over. But there’s tough and then there’s a 90 percent profit plunge (to €330M). Aside from disappearing revenue, BMW shares something else with America’s domestic manufacturers: denial. Just-auto [sub] reports that Bimmer’s CEO reckons the sun will come out tomorrow. Well, the end of this year, anyway. And then everything will be alright, exactly as planned, ja?
BMW is sticking to the long-term targets set out in its so-called Number One strategy despite the current challenging economic times, the automaker said as it announced a fall in 2008’s net profit of almost 90% on Wednesday.
“2009 will be a transitional year for which we cannot yet make any reliable forecasts. Nevertheless, our long-term profitability targets for 2012 remain intact. We want to preserve the independence of the BMW group,” chairman Norbert Reithofer told the annual accounts press conference in Munich.
BMW currently assumes auto sales volumes will fall 10 to 20% this year but Reithofer expects the economy to pick up in 2010.
“At that point we will also gain additional momentum from our renewed product range. The ramp-up of our highest-volume models between 2010 and 2012 will reinforce this trend,” he said.
Ah, yes. High volume. As I pointed out yesterday, a luxury automaker chasing high volumes is a recipe for disaster. Anyway, Bimmer is not alone in facing (or not) this reality. But like they say, at least they’re independent, right? Their fate isn’t tied to anyone else. Oh wait . . .
Finance head Friedrich Eichiner said in his presentation: “We have been regularly holding talks on pooling purchasing volumes with Daimler. Both parties have identified a double-digit number of suitable components. None of these components help differentiate between the brands or are relevant from a customer perspective. Both companies – as well as our suppliers – will benefit from this in the foreseeable future.
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