Staff Report
Published Aug. 5, 2009

BMW AG reported a steep decline in second-quarter profits and said it wouldn’t forecast year-end earnings because of the unfavorable and unpredictable business climate.

The German automaker earned $174 million in the second quarter, down 76% from $729 million during last year’s quarter. As car sales continued to decline across the globe, BMW revenues dropped 11% in the quarter to $18.56 billion.

“True, there might be a few scattered indicators of an economic recovery,” said Norbert Reithofer, chairman of the Board of Management of BMW AG, noting that the company would not forecast full-year results. “However, the economic environment will remain volatile, unstable and characterized by the global economic and financial crisis. A lasting recovery period is not yet in sight.”

In its earnings report, BMW said the United States likely will be the first of the industrialized countries to notice an economic upturn, though not until next year at the earliest.

BMW remains on schedule to compete its $750 million expansion of its Spartanburg County facility. The automaker has repeatedly said market demand will determine how many vehicles its produces there.

Last week, BMW said it offered a voluntary buyout to its Spartanburg employees. A plant spokesman noted that the buyout was offered at all BMW plants across the globe and that it was strictly a voluntary offer.

On Monday, BMW said its U.S. sales for July dropped 26.7% from the same month last year, from 28,977 to 21,253. Year-to-date sales were down 27.4% to 135,701 vehicles.

“While the mass market may have benefited from the ‘Cash for Clunkers’ initiative, BMW did not,” said Jim O’Donnell, president of BMW of North America LLC.