Frankfurt am Main: German high-end carmaker BMW said that new stricter emissions tests for cars as well as refits to older vehicles and global trade tensions would leave revenues and profits short of its full-year forecast.
“The industry-wide shift to the new WLTP test cycle has... led to significant supply distortions in several European markets” and unexpectedly “intense competition”, the Munich-based group said in a statement.
Tougher new EU test procedures came into force this month, a reaction to Volkswagen’s long-running “dieselgate” scandal in which the carmaker admitted to cheating emissions tests on millions of vehicles worldwide.
It is the first time in a decade BMW has had to issue a profit warning, DPA news agency reported.
As well as the effects of “continuing international trade conflicts”, BMW highlighted “increased goodwill and warranty measures” weighing on its performance.
BMW was forced to recall some 324,000 diesel-powered cars across Europe in August, citing risk of a fire in the motor, as well as around 8,000 vehicles fitted with software that reduced emissions during regulatory tests.
For 2018, BMW now forecasts revenues from its car business “slightly lower” than last year, rather than the slight increase previously expected.
In the same segment, its operating profit margin should reach “at least seven per cent” rather than the eight to 10 per cent it had targeted.
And group-wide profit before tax “is expected to show a moderate decrease” year-on-year, rather than staying around last year’s level of 10.7 billion euros ($12.6 billion).
BMW shares shed 5.39 per cent to close at 79 euros, making it the worst performer on Frankfurt’s blue-chip DAX index. — AFP
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