Shares in the world's leading luxury carmaker BMW AG dropped nearly 10 per cent Friday after the German-based group said it was cutting its earnings forecast for the year in the face of a slowing world economy, increasing raw material costs and a weak outlook for US sales, according to DPA. "We now expect that the pretax return on sales for the year to be at least 4 per cent," BMW chief Norbert Reithofer said releasing the carmaker's latest figures. BMW had previously expected its 2008 pretax profit to top its 2007 level. But the carmaker said in a statement: "Business conditions for the automobile industry have deteriorated sharply over the past weeks," said BMW. "Rising oil and raw-material prices, the weakness of the US dollar, the impact of the international financial crisis and a weaker US economy have made business conditions significantly more difficult," BMW said. "We assume that 2009 will be another difficult year," BMW grimly predicted. Last week Daimler AG, the manufacturer of Mercedes-Benz cars, said it was also cutting its 2008 earnings as the economic difficulties facing carmakers continued to mount. The BMW move came after the group reported Friday that second-quarter net profit fell 33 per cent to 507 million euros (790 million dollars) from 753 million in the same period last year. Second-quarter BMW group sales edged down to 14.6 billion euros from 14.7 billion euros as the fallout from the global financial crisis continues to works it way through the world economy. BMW's Second quarter pretax profit dropped 44 per cent to 602 million euros from 1.07 billion euros last year. Shares in the Munich-based carmaker fell by 9.5 per cent to 24.18 euros following the announcement by BMW with the group's announcement helping to drag down stocks of other leading German auto manufacturers. While luxury sports carmaker Porsche AG's shares slumped by about 5 per cent in early Frankfurt trading, Daimler's shares were down about 4 per cent.
