Rolls Royce prices start to slide

BMW, the world’s largest luxury car manufacturer and owner of Rolls Royce motors, today abandoned its August forecast of record auto sales and a 4% operating margin for 2008.

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CEO, Norbert Reithofer, was in downbeat mood, saying that “the financial crisis is by no means behind us yet, particularly its impact on the real economy in 2009”. BMW is cutting production, and increasing its provisions from €695m to €1.04bn, as bad debts are rising and resale values for leased vehicles are falling.

Rolls Royce prices are usually very robust in the used car market, only falling during severe recessions. Their slide suggests Reithofer’s concern about the outlook for 2009 is well-founded.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. He also serves as a Global Expert for the World Economic Forum. The aim of this blog is to share ideas about the influences that may shape the chemical industry and the global economy over the next 12 – 18 months. It looks behind today’s headlines, to understand what may happen next in critical areas such as oil prices, China and Emerging Markets, currencies, autos, housing, economic growth and the environment. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.

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