More auto industry gloom as BMW profits fall and Jaguar extends redundancy plan

There was more doom and gloom from the automotive industry yesterday as BMW admitted a sharp fall in profits and Jaguar announced plans to extend its voluntary redundancy scheme to up to 600 staff.

The German luxury car manufacturer blamed weakening global economies and falling consumer spending for third-quarter profits down by 63 per cent to €298m (£241m) on sales down by 4.2 per cent. The group is to cut production by some 40,000 units this year and will no longer beat last year's sales volumes.

"The performance of the BMW Group in the third quarter 2008 was perceptibly influenced by the economic downswing in the wake of the financial crisis," the company said. "Due to the prevailing adverse climate and the uncertainties caused by the financial crisis, the profitability targets set for 2008 are no longer achievable."

The company is predicting worse to come in 2009 in its three biggest traditional markets of Japan, the US and western Europe. The US will see double-digit contractions, Europe will continue to be badly affected by concerns over CO2 emissions on top of consumer spending issues, and only Japan can hope for stagnation. "There are currently no indications that any of these individual markets will recover; at best, some of them might stagnate at a low level," BMW said.

Although growth rates in the emerging economies remain high, even there sales are likely to be trimmed back.

Meanwhile, in the UK, Jaguar Land Rover is extending its voluntary redundancy scheme after last month's request for 198 volunteers was heavily over-subscribed. The scheme is being extended by up to 400, the company said. The offer, made following consultation with trade unions, is of a lump-sum payment of nine months' pay.

David Smith, chief executive of Jaguar Land Rover, said: "While regrettable, these are necessary actions to manage our business through a very challenging period."

Last month, the company responded to falling production levels by offering staff three months' leave in exchange for a 20 per cent pay cut.

The last month has seen a swath of bad news from across the global car industry. From the US, General Motors reported October sales down by nearly half from last year, while Porsche's US figures for the month came in at 39 per cent down. In the UK, GKN, the parts manufacturer, is axing 1,400 jobs worldwide and cutting full-year profit predictions to some 20 per cent lower than 2007. And Nissan is stopping production of the Micra at its flagship Sunderland factory for several weeks.

Peugeot Citroë*saw sales slump by 5.2 per cent in its third quarter, and is predicting a 17 per cent contraction of the total European car market. In Japan, Nissan reported overall profits down by 39 per cent last quarter, while Suzuki and Fuji Heavy Industries, which makes Subaru cars, have also reported sluggish profits.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: HR Benefits Manager

£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

Recruitment Genius: Office Manager / Financial Services

£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...

Jemma Gent: Year End Accountant

£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...

Jemma Gent: Management Accountant

£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...

Day In a Page

HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

Scientists hail daily pill that protects against HIV infection

Breakthrough in battle against global scourge – but will the NHS pay for it?
How we must adjust our lifestyles to nature: Welcome to the 'Anthropocene', the human epoch

Time to play God

Welcome to the 'Anthropocene', the human epoch where we may need to redefine nature itself
MacGyver returns, but with a difference: Handyman hero of classic 1980s TV series to be recast as a woman

MacGyver returns, but with a difference

Handyman hero of classic 1980s TV series to be recast as a woman
Tunnel renaissance: Why cities are hiding roads down in the ground

Tunnel renaissance

Why cities are hiding roads underground
'Backstreet Boys - Show 'Em What You're Made Of': An affectionate look at five middle-aged men

Boys to men

The Backstreet Boys might be middle-aged, married and have dodgy knees, but a heartfelt documentary reveals they’re not going gently into pop’s good night
Crufts 2015: Should foreign dogs be allowed to compete?

Crufts 2015

Should foreign dogs be allowed to compete?
10 best projectors

How to make your home cinema more cinematic: 10 best projectors

Want to recreate the big-screen experience in your sitting room? IndyBest sizes up gadgets to form your film-watching
Manchester City 1 Barcelona 2 player ratings: Luis Suarez? Lionel Messi? Joe Hart? Who was the star man?

Manchester City vs Barcelona player ratings

Luis Suarez? Lionel Messi? Joe Hart? Who was the star man at the Etihad?
Arsenal vs Monaco: Monaco - the making of Gunners' manager Arsene Wenger

Monaco: the making of Wenger

Jack Pitt-Brooke speaks to former players and learns the Frenchman’s man-management has always been one of his best skills
Cricket World Cup 2015: Chris Gayle - the West Indies' enigma lives up to his reputation

Chris Gayle: The West Indies' enigma

Some said the game's eternal rebel was washed up. As ever, he proved he writes the scripts by producing a blistering World Cup innings
In Ukraine a dark world of hybrid warfare and murky loyalties prevails

In Ukraine a dark world of hybrid warfare

This war in the shadows has been going on since the fall of Mr Yanukovych
'Birdman' and 'Bullets Over Broadway': Homage or plagiarism?

Homage or plagiarism?

'Birdman' shares much DNA with Woody Allen's 'Bullets Over Broadway'
Broadchurch ends as damp squib not even David Tennant can revive

A damp squib not even David Tennant can revive

Broadchurch, Series 2 finale, review
A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower: inside the mansion of Germany's 'Bishop of Bling'

Inside the mansion of Germany's 'Bishop of Bling'

A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower