BMW Group has revised its financial expectations for the current financial year – forecasting a lower pre-tax profit and revenues.
Citing its early implementation of the new WLTP regulations requirements as a main factor in the adjustment, it also said that earnings before interest and tax were expected to be ‘at least seven per cent’ – down from 2017’s 8.9 per cent and missing the eight to 10 per cent figure for the first time in eight years.
In its statement, it said: ‘BMW Group implemented the requirements of the WLTP regulations early. The industry-wide shift to the new WLTP test cycle has, however, led to significant supply distortions in several European markets and an unexpected intense competition.
‘Thanks to its flexible production and sales strategy, the BMW Group is responding to this increased competition and is reducing its volume planning to focus on earnings quality.’
International trade conflicts were also blamed for causing uncertainty and pricing pressure in several markets.
Harald Krüger, BMW AG board of management chairman, sought to give reassurance though, saying: ‘The BMW Group remains fully committed to its goal of leading the transformation of the industry.’
In its statement, BMW added that it always expected 2018 to be a challenging year ‘due in part to additional upfront investments of around one billion euros for future mobility’.
The announcement follows German automotive giant Daimler also aligning expectations for its profits in June this year.