BMW’s China joint venture partner, Brilliance, said today it expects first-half net income to fall about 40 percent. The decline is attributed to the troubling premium cars market which has been slowing down over the last two years.
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The profit warning is the latest sign that demand in China for luxury cars is declining amid a moderation in economic growth and volatility in the stock market. Earlier this year, BMW upped their financial assistance to Chinese dealerships and reduced the sales projections.
For Bloomberg, BMW said it remains confident in the Chinese market despite the projected decline in profit at its joint venture partner.
“The mid- and long-term conditions and prospects for the Chinese car market continue to be attractive,” BMW said in an e-mailed statement. “These include the low rate of car ownership, an expanding middle-class, our strong market position and the continuing growth of the premium segment.”