BMW has achieved its reduced outlook for a clear 2008 profit although revenue declined as the credit crisis depressed global car markets.
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BMW’s total revenue fell 5.0% to EUR53.2bn (US$68.2bn), in line with a Starmine SmartEstimate of EUR53.3bn, Reuters reported. Turnover at its core automobile division dropped 9.4% to EUR48.78bn.
The company last month reported a decline of 4.3% in group sales volumes for 2008 – its first annual drop since 1993.
“Apart from the great reticence to purchase new vehicles, there were also no signs of stabilisation on the used car markets and consequently of residual values for vehicles coming out of leases,” BMW said in a statement cited by the news agency.
Total capital expenditure edged 1.5% lower to EUR4.2bn as an 8.2% drop in capitalised development costs offset a slight gain in investments for property, plants and equipment.
The company cut headcount by 7.0% to 100,041 by the end of the year.
After initially forecasting in March an increase in pretax profit over an adjusted EUR3.78bn in 2007, BMW cut its target last August before scrapping it entirely in early November.
Reuters noted that BMW said at the time it was “as good as impossible” to give a reliable guidance, merely pledging to ensure earnings before tax would remain clearly positive.
The report said analysts were now re-evaluating whether the premium car market’s true potential may demand significantly lower volumes in the future, now that the worst excesses of easy credit have come to a screeching halt.
The crisis has also resulted in thousands of job losses on New York’s Wall Street and in London’s ‘City’ or ‘Square Mile’, home to investment bankers that once spent lavishly to buy the latest luxury car with generous bonuses, Reuters noted.
