Slow auto sales aren’t just affecting American automakers. BMW today released a profit warning due to diminishing US sales.
The German automaker has been battling slower sales in several markets, but the sluggish U.S. economy may hurt the most. BMW expects profit margins to drop nearly three percent in 2008, as rising transportation and material costs eat away at remaining profits.
In order to remain profitable, BMW plans to increase prices, reduce production by 20,000-25,000 cars, and eliminate over 8,000 jobs. Presently, BMW has only managed to release about 4,000 workers because current employees are unwilling to leave.
BMW’s actions mirror those of their competitors as the global automotive industry scrambles to sell cars to a changing and economically stressed market.
Source: The Times