Luxury automaker BMW AG says its second-quarter profit skidded 76 percent lower as consumers put off buying its pricey vehicles. It said a "lasting" economic recovery was not yet in sight.
The Munich-based company earned euro121 million ($173 million) in the April-June period, compared with euro507 million a year earlier.
Sales fell 11 percent, dropping to euro12.9 billion from euro14.5 billion, The New York Times reports.
Germany ’s government-rebate program to encourage trade-ins of cars older than nine years hasn’t helped BMW as buyers using the incentive choose cheaper models made by competitors such as Volkswagen AG. BMW Chief Executive Officer Norbert Reithofer said today a “lasting and wide-ranging recovery” in the luxury car market is “not yet in sight.”
“Now we have to see whether demand goes up in the second half, although we don’t expect a rocket-like rise,” said Frank Biller, a Stuttgart-based analyst at Landesbank Baden- Wuerttemberg. “BMW reduced its inventories and will now have to spur production again,” Bloomberg reports.
BMW, whose brands also include Mini and Rolls-Royce, said its car deliveries fell 18 percent in the second quarter to 338,190 vehicles, compared with 413,087 a year earlier.
Deliveries fell 18.6 percent for the BMW brand, 15.7 percent for Mini, and 50.3 percent for the Rolls-Royce brand. The motorcycles division saw a 14.7 percent reduction in deliveries.
Despite the fall in deliveries, the company said it did increase its liquidity, eTaiwan News reports.