By on June 26, 2012

While other carmakers are treading water or worse, BMW’s global sales were up 9.1 percent for the first five months of the year, mostly on strong gains in China. That party is about to end, claims Citi Investment Research and downgraded BMW AG  from “buy” to “neutral,” Reuters reports.

In the euphemistic world of stock analysts, a “neutral” usually means a sell.

“It would seem the emerging markets story driving BMW’s share price is finished for now,” Citi analysts wrote in a research note. In its home market Europe, BMW’s growth is arrested. EU sales were down 5.9 percent in May, and are down 1 percent in the first five month of the year. Citi figures that the growth elsewhere can no longer make up for the widening decreases at home.

Other experts think the bearish sentiments are bull.

Nissan’s CEO Carlos Ghosn today warned against counting China out. It is true that growth slows in China, however, “the smaller growth in China still exceeds the growth elsewhere.”

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9 Comments on “Analyst: Dump BMW!...”

  • avatar
    The Doctor

    It’s not a question of whether growth in China slows but whether it goes tits-up entirely. No amount of yanking of policy levers is going to alleviate the horrible imbalances that the BoC’s monetary policy has created.

  • avatar

    I want to love BMW again. But with the cancellation of the normally-aspirated straight six, the porkification, the greatly increased electronic complexity without apparant concomitant gains in reliability, I just don’t know. Heck, even the new Beemer R-class bikes are going water-cooled. Bad News Bears.

    It seems that, around Nashville anyway, folks who want sporty luxury are going to Audi; if they want just plain luxury, they are returning to Benz.

    • 0 avatar

      Welcome to our “enthusiast” forum, friend! I see that you have an opinion on a multi-national manufacturer that is related to your desires as an “enthusiast” and would like to help address your concerns so that you may be more satisfied with your next trip to our showrooms to buy your next car!

      I understand that you are upset over our new engine programs designed ultimately to provide a modular solution that cuts down on expense between models. I also understand that you take issue with our enhanced safety and comfort/entertainment options, or as you put it, “Porkification.” Lastly, you are not happy with the rapid rate of computerization that every manufacturer in the world is pursuing (not to mention is a necessity to keep our customers in the latest and greatest whiz-bang gadgets and iWhatever integration.)

      Might I suggest that you speak directly with a sales representative next time you are in the dealership and ready to put $65,000 down on a new car and we will be happy to address your concerns.

      Oh, I’m sorry. I did not realize you were not actually a customer, and do not buy a new car every 36 months.

      And for issues concerning our motorcycle division (really, you are complaining about water-cooled bikes?) please contact the ENTIRELY DIFFERENT SIDE of the company that handles that.

      It’s funny that your anecdotal evidence would suggest people drifting away from BMW; If anything, I have seen the opposite. Certain… Ethnic… buyers that would automatically go to MB are showing up with big shiny new roundels. And the concept of “sport” luxury is such a tiny part of the market that it’s hardly worth mentioning. “Oh noes, we lost all those whiny wanna-be weekend racers who void warranties then complain loudly. What ever shall we do? Guess we’ll just have to cry to the GIGATONS of trophy wives and middle managers who just want to be seen in the badge, boo hoo.”

      • 0 avatar

        Yea dude like totally agree with elloman, as long as my bmw is 1/4 of a second quicker on the nurburgring, I dont care what engine is in it… as long as its automatic. As for the weight, I dont care it will keep me safe from all the suvs. And with 18 air bags, lane guidance, stop assist, and the latest infotainment, the car will drive its self while I tweet about celebrities. And besides Caboose, who cares about engine complexity? My parents will just pay the repair bills, just like yours will.

    • 0 avatar

      Not to mention future FWD vehicles…

  • avatar

    “The smaller growth in China still exceeds the growth elsewhere.”

    Which is true, but you’d think that people would be wary about growth numbers in a country where the growth is still centrally planned. ‘State capitalism’… with the government invested in so many industries, it’s really a matter of saying “You there, grow 8% this year!” … hence why there is so much construction ahead of demand. Build empty developments…whole cities.. and wait for economic activity to fill it in. It sort of works because there is so much room to grow, but the party will end sometime. Who knows when.

    From what I’m hearing, real world inflation is much higher than what the numbers are telling right now… this is true for any country since people tend to cherry pick what they put in the basket for inflation indexes, but here in Vancouver, you can feel the slowing of the hot Chinese money in the property market, and that’s tied to global circumstances. China is a growth opportunity, but as things get desperate for some companies, it will probably go further and turn into a business case. Rationally appealing, but potentially fraught with peril.

  • avatar

    BMW can marvel at the growth it’s enjoyed over the last decade but how much more can it grow sales from its existing range of cars. It seems to me they need another brand. The I cars will not be the answer because they will be too expensive to boost revenue or growth significantly, time then for BMW to find another brand.

  • avatar

    That a case of the pot calling the kettle black! Citi bank calling BMW a poor investment, the nerve.

  • avatar
    Robert Gordon

    Out of interest, what happened to the final story in the BMW ‘M’ life history?

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