BMW CEO faces criticism for bad Q1 results and lack of ambitious electric strategy

Source: Xinhua| 2019-05-17 04:13:16|Editor: Mu Xuequan
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BERLIN, May 16 (Xinhua) -- Harald Krueger, chief executive officer (CEO) of the German luxury car maker BMW, faced a tough audience of shareholders at BMW's Annual General Meeting (AGM) in Munich on Thursday.

"Currently, only bad news comes from BMW," said Janne Werning from the German fund company Union Investment at the AGM.

Last week, the German car manufacturer reported its first loss in a decade in the main automotive division of BMW in the first quarter of 2019.

The German car maker's operating profits (EBIT) fell by 78 percent to 589 million euros (658.5 million U.S. dollars) in Q1 of 2019, compared to 2.7 billion euros in Q1 of 2018.

BMW's profit margin in the automotive business has been below the company's target value of 8 percent for months.

Although the Munich carmaker sold more cars last year than in the previous year, profit before taxes fell to 9.8 billion euros and are expected to fall below 8.9 billion euros this year.

Daniela Bergdolt, vice president of Germany's leading association for private investors (DSW), said that "I am not satisfied with BMW".

In addition, during the course of the year, shares of BMW had lost 25 percent of their value. BMW announced to lower dividends to 3.50 euros per share from 4 euros of the previous year.

BMW CEO Krueger whose contract is up for renewal in May next year sought to reassure shareholders.

"We are continuing our successful development. We have made a good start to the year in terms of sales. We delivered more vehicles than ever before in a first quarter," Krueger said.

Last month, however, BMW issued a profit warning after European antitrust authorities said their "preliminary view" following a two-year investigation was that BMW and four other German carmakers had colluded to delay the introduction of clean emissions technology.

For this reason, the German car manufacturer had booked a provision of 1.4 billion euros in the first quarter of 2019.

Regarding the ongoing investigations by the European Commission, BMW CEO Krueger said "our position is clear: the accusations made by the EU Commission are unjustified".

"We therefore defend ourselves with all legal means, if necessary," Krueger said on Thursday at the AGM in Munich.

While Volkswagen, Daimler and Audi were investing in electric cars "at full speed, BMW is traveling in Munich with the handbrake on," Union Investment fund manager Werning complained ahead of the AGM.

Answering calls for more commitment to electric cars, Krueger said that "technological openness is crucial in order to be able to flexibly meet the various customer requirements".

Nonetheless, by the end of next year, the BMW Group is planning to launch more than 10 new all-electric and plug-in hybrid car models.

By 2025, this number should rise to at least 25 electrified models, half of which will be fully electric, according to the German car maker.

"Our market is global and we want to inspire people all over the world with our products -- not patronize them," said Krueger at the annual assembly.

Werning criticized that BMW had no clear offer for environmentally minded customers "who want to set a visible sign for climate protection by purchasing a new-design electric car in the next two years".