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      04-27-2008, 04:21 PM   #1

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BMW to Book Charge Against Cars' Lower Value in U.S

I just noticed this is a oh well...

BMW to Book Charge Against Cars' Lower Value in U.S. (Update1)

By Jeremy van Loon

April 24 (Bloomberg) -- Bayerische Motoren Werke AG, the world's largest maker of luxury cars, will book a 236 million- euro ($370 million) charge after the weaker U.S. economy hurt the resale value of new autos it sells under lease agreements.

The charge, to be booked in the first quarter, takes into account an increased risk provision for lease vehicles and a higher level of bad debts and payment arrears, Munich-based BMW said in a statement today. The company reiterated that it still plans to boost pretax profit this year.

``The financial crisis has become more severe of late,'' BMW said. ``This has resulted in a drop in pre-owned car selling prices, particularly in North America, and consequently in a reduction of revenues that can be generated on vehicles at the end of lease contracts.''

The German company's U.S. sales fell 5.4 percent to 27,404 cars and sport-utility vehicles in March, led by an 8.7 percent drop at the main BMW brand, as an economic slowdown hurt demand for its top-end models. The world's largest economy accounts for one-quarter of the company's deliveries.

BMW fell 32 cents, or 0.9 percent, to 33.58 euros. The stock has declined 21 percent this year, reducing the company's market value to 21.6 billion euros.

I wonder how all this is going to affect BMW prices and lease options in the future.
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      04-27-2008, 04:24 PM   #2
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Really bad economic situations these days. . .

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      04-29-2008, 10:18 PM   #3
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That's one of the reasons BMW has great finance offers right now. They want to get more people to buy rather than lease.

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