Trade tumult and emissions tests behind falling profits, BMW says
The high-end car makers net profit slumped 16.9% to €7.2bn
Frankfurt am Main — Profits at German high-end car maker BMW tumbled in 2018, the firm said on Friday, with trade headwinds and tough new EU emissions tests' drag on performance set to last into 2019.
"Challenges facing the entire sector are unlikely to diminish in the coming months," CEO Harald Krüger said in a statement.
Net profit at BMW slumped 16.9% to €7.2bn, the group said.
The Munich-based firm pointed to "political uncertainty, a cooling global economy … rising production costs to meet regulatory requirements, exchange-rate effects and rising raw materials prices" as weights on its earnings.
Operating, or underlying, profits fell less sharply, shedding 7.9% to €9.1bn.
Revenues were less strongly affected, falling 0.8% to €97.5bn.
The scrambling by other car makers to sell cars not certified under the so-called WLTP test cycle before its introduction in September led to "unexpectedly intense competition", BMW said, penalising the group for its decision to adopt the new procedure early.
Meanwhile the group's bottom line also suffered as it was ordered to recall more than one-million diesel cars to replace faulty components.
BMW boosted unit sales at its flagship brand slightly, to 2.1-million cars, but deliveries of Minis fell back 2.8%, to 361,500.
Luxury subsidiary Rolls-Royce lifted shipments 22%, to 4,107.
Looking to different world regions, sales in Europe were flat while the Americas and Asia recorded slight growth.
"Volumes grew significantly" in China as BMW ramped production of X3 SUVs locally, the group said.
Bosses said they would offer shareholders their second-highest dividend payout ever, at €3.50 per share.
Looking ahead to 2019, BMW expects a "slight increase" in unit sales, in part thanks to new models.
Investors offered a mildly positive reaction to the news, with BMW stock gaining 1.1% to trade at €74.59 at 11.30am in Frankfurt.