BMW Says No Recovery This Year from Global Recession

BMW issued a cautious, not to say pessimistic, forecast along with news of a small profit for the second quarter.

"True, there might be a few scattered indicators of an economic recovery. However, the economic environment will remain volatile, unstable and characterized by the global economic and financial crisis. A lasting recovery period is not yet in sight," said BMW Chairman Norbert Reithofer.

In its second-quarter earnings report yesterday, BMW said the global recession is not likely to end until some time in 2010.

For the quarter, BMW reported net income of about $174 million, down 76 percent from the year-ago quarter. For the first half, BMW had a net loss of about $45 million, versus net income of about $1.4 billion in the year-ago period.

Total sales of BMW, Mini and Rolls-Royce brands fell by 18 percent in the quarter, to 338,190 units. In the first half, unit sales fell 20 percent, to 615,454.

To avoid a backlog of unsold cars, BMW cut production in line with demand, or even more. Total production for all brands combined was down 26 percent in the second quarter, to just over 300,000. In the first half, BMW cut production 30 percent to about 574,000. Other automakers around the world are taking similar measures, to try and cut costs and production faster than the drop in demand.

Reithofer refrained from making any prediction for BMW's full-year financial results for 2009, other the obvious statement that BMW expects to sell fewer cars in 2009 than in 2008.

"There is still a lot of uncertainty in the markets. There is no unified agreement among experts. This is why we are not announcing a result forecast for the full year 2009 today," he said in an Aug. 4 conference call.

Chart: BMW