German luxury car maker BMW has warned that it will not be able to reach its 2008 targets, after posting a drop in first-half profits.
BMW had previously expected to see an increase in pre-tax profit for the full year this year, but that figure fell by 35% in the first six months to €1.24 billion.
The company has been hit by slumping sales and by the international financial crisis, which has affected its financial services division. In the first half, BMW set aside €695m to cover financial risks. Job cuts cost the company an additional €107m, it added.
'Steep rises in oil and raw material prices, the weakness of the US dollar, the impact of the international financial crisis and a weaker US economy,' were all factors behind the weaker results, BMW said.
The US is a crucial market for BMW, and the group has suffered from the euro's rise in value against the dollar. Last week, German rival Daimler also cut its full year profit forecast owing to deteriorating car markets.
Meanwhile, Japan's Nissan has said its net profit tumbled 42.8% in its first financial quarter, hit by a stronger yen, high raw material costs and a slowing global economy.
Net profit fell to 52.8 billion yen in the three months to June. Revenue slipped 4%.
