The manufacturer blamed slow sales in the US and said a drop in pre-owned car sales prices had reduced the revenues that could be generated on vehicles at the end of lease contracts.

It was therefore necessary, the carmaker said, to recognise a higher risk provision for lease vehicles as well as the increased level of bad debts and payment arrears. BMW remained optimistic, however, saying it still expects to post a higher pre-tax profit in 2008. In 2007 BMW posted pre-tax profits of €3.87bn.