- The Washington Times - Wednesday, March 18, 2009

FRANKFURT (AP) - German carmaker BMW AG said Wednesday it was facing a “transitional year” and that it expected sales volumes to decrease 10 to 20 percent in 2009 because of the economic crisis.

The Munich based-company said although it couldn’t make a truly reliable forecast at this point, the current assumption is that sales volumes will decrease by 10 to 20 percent over the course of 2009. Sales volume is the number of cars sold, not actual revenue.

Chief Executive Norbert Reithofer said the company will this year focus on liquidity, free cash flow and working capital, fixed costs and investments.

“We want to maintain the BMW group’s independence,” he said.

Last week the company reported a fourth-quarter net loss of euro962 million ($1.3 billion), a figure that was dragged lower by one-time risk provision charges, and compared to a profit of euro173 million a year earlier. Sales in the final three months of 2008 fell 18 percent to euro13 billion from euro16 billion in 2007.

For the whole of 2008 the automaker posted a net profit of euro330 million compared with euro3.1 billion in 2007. Sales also fell 5 percent, to euro53 billion.

“We prepared ourselves early on and swiftly for severe business conditions, for example by taking immediate steps to bring production volumes in line with lower demand,” Reithofer said in the company’s report Wednesday.

“Nevertheless, our long-term profitability targets for 2012 remain intact,” he said.

BMW confirmed that it plans to save more than euro4 billion in material costs by 2012. Besides savings and reduced output, the company has also decreased its payroll levels, though it didn’t announce any new layoffs or job cuts.

The company’s payroll was 7 percent lower at just over 100,000 employees worldwide at the end of 2008, compared with about 108,000 at the end of 2007.

Bernstein Research analyst Max Warburton wrote in a recent note to clients that BMW is the car company with the best liquidity in Germany, and “the safest place in European autos,” in terms of an investment.

Shares of BMW ended down 2.4 percent at euro22.31 ($29.23) in Frankfurt.

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On the Net:

http://www.bmw.com

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