BMW reveals a sharp fall in sales of top ranges
By Uta Harnischfeger in Munich - 28 Mar 2000 21:00GMT
Sales of BMW's top car ranges - the 5 and 7 series, fell sharply last year, the
German luxury carmaker revealed on Tuesday.
The figures demonstrate the pressure BMW faced to end its
costly Rover debacle in order to focus on its key brands.
The group, led by chairman Joachim Milberg, announced plans for the
break-up of Rover, the UK automotive group, two weeks ago.
Sales of the 5-series were down 8 per cent at 203,000 vehicles, while
sales of the 7-series were down 9 per cent at 43,000 vehicles.
The company is not due to launch a successor to the 7-series before the
second half of next year. It faces strong competition from
DaimlerChrysler's C-class and potentially from Audi's new A-class, to be
launched later this year.
Sales of the lower-margin 3-series rose 7 per cent, taking them to over
500,000 for the first time. Overall, group sales rose 6.6 per cent to
E34.4bn ($33.36bn) from E32.3bn. Operating profit rose 4.7 per cent to
E1.11bn from E1.06bn. Analysts attributed much of the rise in operating
profit to currency gains, reflecting the euro's steady fall against the dollar
and the yen in 1999.
Helmut Panke, finance director, said BMW would not take any additional
charges for Rover in 2000 following the one-off charge of E3.2bn
announced two weeks ago. The company said on Tuesday that roughly
E2.5bn of the E3.2bn would be a writedown for Rover assets while
another E500m would go toward the depreciation of stock.
Mr Panke said BMW would continue to incur operating losses at its
Rover cars and Land Rover units until the sales of Rover to Alchemy
Partners, the UK venture capital firm, and of Land Rover to Ford Motor,
had been completed. They are expected in late May and late summer
respectively.
He said that most of Ford's E3.1bn purchase price for Land Rover would
be an extraordinary gain in 2000.
The company said Land Rover, widely assumed to be highly profitable,
had been making losses even before last year, though it gave no details.
Analysts say BMW needs a stronger strategy if it is to remain
independent. There are doubts over its ambitions for a small BMW to fill
the gap after Rover's disposal.
"BMW still has great status, but it lacks momentum," said JĀrgen Pieper,
analyst at private bank Bankhaus Metzler. |
