BMW expects hit from trade dispute and emissions tests
FRANKFURT — German luxury automaker BMW said Tuesday that its profits and sales will fall short of its forecasts this year, saying that fear of international trade conflicts has weighed on pricing and citing the impact of new emissions tests on European markets.
The profit warning — the second from a major German automaker this year — underlines the difficulties facing the industry in maintaining its record of steadily growing sales and profits.
The Munich-based company said that sales revenue in its automotive division would fall slightly compared with last year’s instead of increase, while earnings before tax would be moderately below last year’s 10.66 billion euros ($12.55 billion) instead of roughly in line.
A key earnings metric — the operating profit margin — would fall short. BMW predicts a 7 per cent profit margin, below its target range of 8-10 per cent. The figure represents how much the company is making per vehicle, an area that has been a strong point for makers of higher-priced cars.