Car industry hit by economic downturn

Car manufacturers have been hit by the deteriorating global economy, with BMW and Nissan reporting falls in profit. General Motors also reported a second-quarter net loss.

BMW posted pre-tax profits of £474m in the three months to the end of June. This was 43.5% below the same corresponding period of last year. The drop will see the German car manufacturer miss its 2008 targets.

BMW says in a statement: “Business conditions for the automobile industry deteriorated sharply again in the second quarter, due to further ongoing 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.”

Nissan, owned by Renault, similarly posted a 46% drop in quarterly profit.

Meanwhile, General Motors suffered from a $15.5bn (£7.6bn) second-quarter loss. Revenue fell 18% to $38.2bn (£19.1%), led by a heavy drop in North American sales.

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