BMW First Quarter Profits Down
BMW AG suffered a 17% fall in profit in the first quarter of 2008. The luxury car makers own an array of brands including BMW, Mini and Rolls Royce. They earned 487 million euros ($761 million) from January through March, down from the 587 million euros it earned in 2007 and much below posted predictions.
BMW has attributed this loss to the one-time charge on risk provisions, that the company made this quarter, to shield itself from lower used-car prices and the risk of bad debts consequent to loans for leased cars in the U.S. This provision amounted to 236 million euros ($368.82 million).
Notwithstanding the drop in profits that are apparent on paper, the car maker is in reality faring pretty well. Sales are up 11% as compared to the same time last year. 2008 sales figures are 13.3 billion euros ($20.8 billion) as compared to 12.6 billion euros in 2007. 2007 had also been a good year fro BMW, selling 1.5 million cars, its sales were at a record high. The demand was particularly greater for the Mini and X5 SUV.
BMW are confident that they are on track for achieving their target of selling 1.8 million cars in 2012. They are sure they will register sales gains in 2008.
BMW’s pre-tax profits for the first quarter, in 2008, stand at 641 million euros ($1 billion), as opposed to 852 million euros in the first quarter in 2007.
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