BMW net income fell 62.9 percent in the third quarter, to 298 million euros (about $447 million), thanks to the international financial crisis and lower sales in traditional markets like the United States, the brand’s single biggest market for car sales.
Through nine months, net income was down 39.7 percent from the year-ago period, to around $2 billion.
“The major traditional car markets have been affected particularly badly, whereas growth in most of the emerging economies remained relatively high,” such as Russia, China and India, BMW said in a Nov. 4 statement. Other luxury brands report the same phenomenon, as emerging luxury-car markets continue to grow, granted from a much smaller base.
For the BMW brand, U.S. sales in 2008 were down 9.6 percent through September, to 195,833. The company has already conceded there’s no way it will top 2007 sales this year, with BMW ending a 16-year streak of increasing U.S. sales.
The Mini brand has been a positive note in the U.S. market, up 27.4 percent through September to 40,694. U.S. Rolls-Royce sales are also up an estimated 26.9 percent through September, to 288, according to AutoData Corp. BMW owns the BMW brand, plus Mini, Rolls-Royce, and BMW motorcycles.
BMW said its Financial Services sector had a pre-tax loss of about $25.5 million in the third quarter, versus a year-ago profit of $286.5 million.
Year-to-date results included a special provision for residual-value risk of about $840 million. That’s for the lower-than-expected value of vehicles coming back from leases. Archrival Daimler has also been forced to increase the money it has set aside to cover losses on residual values.
BMW has also trimmed its work force 3.8 percent year to date, to 103,625.
