FRANKFURT: German high-end carmaker BMW on Wednesday posted a steep drop in quarterly profit as new EU emissions tests, global trade tensions and costly recalls weighed on the bottom line.
The Munich-based group said net profit between July and September slumped 24 per cent year-on-year to $1.6 billion, falling short of analyst expectations.
Third-quarter revenues were up 4.7 per cent to 24.7 billion, supported by brisk demand for the group’s vehicles which include the compact Mini and luxury Rolls-Royce.
The group had already issued a rare profit warning in September when it was forced to lower its full-year outlook in the face of a series of setbacks.
Chief among them was the introduction of tough new EU pollution tests known as WLTP, which sent rival carmakers scrambling to shift non-compliant models before the September 1 deadline.
This resulted in “unexpectedly intense competition”, BMW said.
The group has also been unnerved by US President Donald Trump’s festering trade row with China and his threats to slap steep tariffs on auto imports from the European Union.
“The ongoing international trade conflicts had the effect of aggravating the market situation and feeding consumer uncertainty,” said BMW.
The automaker also felt the pinch from a mass recall of diesel-powered cars over a fire risk in the third quarter, and increased spending on electric and self-driving cars.
“Particularly in these volatile times, we are maintaining our focus on the future and taking the decisions that will lead to tomorrow’s success,” said chief executive Harald Krueger. — AFP
Oman Observer is now on the WhatsApp channel. Click here
