BMW expects slowdown in sales and profit in 2015

Article by Andrew Christian, on March 23, 2015

BMW is seeing a slowdown in sales volume and profit this year due to aging models and higher investment costs for new technologies. The German carmaker is expecting a medium-to-high single-digit growth in sales and profit this year. Chief executive Norbert Reithofer remarked that sales and profit forecast rest on the assumption that the global economic conditions will remain stable and won't deteriorate.

He noted that a number of uncertainties remain like the losing momentum in important markets like China. Reithofer is leaving a post that he held for more than eight years and will be succeeded by Harald Krueger on May 13. He said that there were challenges ahead for Krueger. "The future belongs to the next generation,” Reithofer said.

BMW logged a 10.3-percent jump in earnings before tax in 2014 to EUR8.71 billion ($9.23 billion). With that, BMW has posted its fifth straight record year since the global economic crisis, Reithofer said in a statement.

The carmaker saw sales of its BMW, Mini and Rolls-Royce brands jumped 7.9 percent to 2.12 million in 2014 and posted a 5.3-percent surge in sales in the United States.

It logged a 5.7-percent leap in group revenues to over EUR80 billion, most of which sales-driven BMW said. Its automotive division logged an EBIT margin of 9.6 percent in 2014. For the fourth quarter of that year, BMW posted fourth-quarter group pretax earnings of EUR1.87 billion.

BMW also logged a substantial hike in revenues to EUR22.7 billion, thanks to higher sales and currency tailwinds. In 2014, BMW’s investments reached nearly EUR4.6 billion on new models and technologies like self-driving systems, resulting to capital expenditures amounting to 5.7 percent of revenue.

Chief financial officer Friedrich Eichiner said in a statement that BMW will try to keep that margin.

Topics: bmw, sales, profit

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