Germany’s BMW, the world’s largest premium automaker, said recently its financial target for the entire year could be affected if there are any further slowdowns across the Chinese market.
The automaker’s sales in China, the world’s largest auto market, dropped for the first time this year in around ten years as the overall market has turned negative because of the slowdown in economic growth and the recent stock market rout that started mid June. BMW has been exposed to increased competition across the Chinese market because the slowing economy has left its rather aged product lineup exposed more than ever. The German group has already announced in May its growth in China would turn “less dynamic” this year. Still, during the second quarter earnings call it still forecasted new records in terms of deliveries and group pretax profit – but warned the recent Chinese woes could impact “the scale of the increase” over last year’s pretax profit of 8.707 billion euros. “If conditions on the Chinese market become more challenging we cannot rule out a possible effect on the BMW Group’s outlook,” commented the Munich-based company in a statement about its quarterly financial figures.
During the second quarter, sales across the BMW, Mini and Rolls-Royce brands actually soared by 2.3 percent in China, the world’s second largest luxury market, though the figures were negative in May and June following a decade of uninterrupted advances. The group added the fierce competition elsewhere has also reached China and last month their local partners Brilliance China Automotive issued its own profit warning, with its earnings highly dependent on the joint venture with BMW.