BMW Says Chinese Slowdown May Force It to Revise Forecast - Bloomberg
BMW AG said slowing sales in China may force it to revise this year’s profitability goals, challenging new Chief Executive Officer Harald Krueger as he seeks to defend his lead in the global luxury-car industry. Earnings before interest and taxes from automaking are still expected at 8 percent to 10 percent of sales, though “if conditions on the Chinese market become more challenging, we cannot rule out a possible effect” on the forecast, the Munich-based... The second-quarter margin on automaking fell short of analysts’ expectations because of a combination of the aging 7-Series sedan, due to be refreshed this year, and slowing growth in China, Raab said. The company’s margin narrowed to 8. 4 percent, the lowest level since 2009, compared with 11. 7 percent last year. BMW’s margin trailed Mercedes-Benz and Audi, which reported respective returns on sales of 10. 5 percent and 9. 8 percent. The shares fell as much as 2. 9 percent and traded down 2. 3 percent to 89. 96 euros at 12:59 p. m. in Frankfurt. More of the company’s sales came from lower-margin compact cars in the second quarter, driven by a nearly fivefold increase in 2-Series shipments and a 24 percent jump in Mini-brand sales. Source: www.bloomberg.com
