BMW China partner issues profit warning
Print Edition
BRILLIANCE China Automotive Holdings Ltd, which makes BMW cars in China, issued a profit warning yesterday, citing slowing sales in the world’s biggest car market.
Brilliance, which makes minivans for China’s domestic market and assembles luxury cars for BMW via its joint venture with the German carmaker, said it expected first-half profit to fall 40 percent from a year earlier mainly because of lower results from its BMW Brilliance 50 percent owned joint venture.
“The decrease in BMW Brilliance’s profit was caused by the higher selling costs incurred during the first six months of 2015 as a result of the slowdown in the growth of the Chinese economy and the automotive industry,” Brilliance said in a statement to the Hong Kong stock exchange.
Brilliance’s profits, which are highly dependent on the JV’s earnings, would be roughly 2.2 billion yuan (US$354 million) for the first half of 2015, according to a Reuters calculation.
BMW Brilliance also faces higher costs as it prepares to launch new models and new production facilities, according to the filing.
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