6:44 pm, August 5, 2008
BMW’s plans to make a super-luxury rival to the Range Rover have hit the buffers due to the credit crunch.
Chief executive officer Norbert Reithofer has confirmed that plans to develop the X7 – like the mock-up found on the internet pictured here – have been shelved due to deteriorating economic conditions, particularly in the US and Europe.
Last week, BMW issued a profit warning saying it does not expect to hit its financial targets this year. Reithofer said 2009 will be a little better.
The company has been particularly badly hit in the US where it has been aggressively targeting sales in recent years by offering discounts and low-cost leases. Vehicle sales across the Atlantic have stalled as petrol prices reach $4 (£2) a gallon, hitting large pick-ups and SUVs in particular.
BMW now says it will reduce the number of cars it planned to sell in North America by 40,000 units, either by selling them elsewhere or by cutting production.
Chief Financial Officer Michael Ganal says that if current foreign exchange rates persist, particularly for the dollar and the British pound against the Euro, then 2009 will be a ‘major challenge’ for the company in terms of its impact on earnings.
BMW’s second quarter net profit plunged 33 per cent to €506m (£400m) and the company said that it will concentrate its sales efforts in the currently more lucrative markets of Russia and China.
