News from China that BMW will have to pay $820m to Chinese distributors in rebates plunged shares 2.6%.
The subsidies allocated to Chinese distributors have arisen due to retailers ceasing orders, possibly due to Chinese authorities bringing in new laws to restrict vehicles on roads. However, sales figures for November 2014 in Mainland China reported a 17.2% rise in deliveries over the same period (415,209 / prev. yr. 354,153).
BMW showed a good year for 2014 with record sales reported in November and shares were up over the year as consumers took advantage of low oil prices and the impact on pump prices to buy more and larger cars: Worldwide sales up 7.6% with 188,342 deliveries, and Year-to-date deliveries increase 7.1% to total 1,902,699.
But the new year has seen BMW shares retreat as discussions are being held with dealers over this year’s targets for sales.
BMW AG has BMW, MINI and Rolls-Royce as its brands, and whilst sales of BMW cars rose, Rolls-Royce shares have fallen dramatically from January 2014 highs of 1254 to October lows of 775.25. Shares are now at 861.75.
BMW shares also saw loses in 2014 but a steady upward trend from recession levels of 16.0 in 2008 is still apparent. Today’s trading on BMW saw a gap at opening down from 87.865 to 85.86.
One of the largest geographical declines seen by BMW was in Russia where sales fell by 27% as economic recession and crisis set in. The highest seller in BMW’s stable was the Xs, up by 34% world-wide in the first nine months of 2014, which pushed up profits for the German based car manufacturer in the last earnings report.
In the meantime, BMW also announced price increases for US sales taking the popular X1 sDrive28i up from $31,850 to $32,150 in BMW’s stagnant state-side market, where they reported November 2014 sales in the Americas as on the same level as November 2013.
MT4 chart: BMW
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