BMW 'on right track', chairman says, as profit warning hits shares

By Gilles Guillaume

PARIS, June 18 (Reuters) - BMW is "on the right track" with its next-generation models, supervisory board Chairman Nicolas Peter said on Thursday, days after a shock profit warning that has hit the German automaker's shares.

Orders for BMW's Neue Klasse models are strong and "good news both for the manufacturer and for the suppliers involved in the project", Peter told journalists in Paris.

The Neue Klasse is a new line of models underpinning an overhaul of BMW's range as it faces fierce competition and falling sales in China, a key driver of Tuesday's guidance cut.

The company's shares fell again on Thursday, hitting their lowest since November 2, 2020. They closed down 4% after brokerages including Citi and HSBC cut target prices.

CHALLENGES FOR NEW CEO

"The magnitude of this latest downgrade - the third predominantly China-driven downgrade in as many years - is greater than we had anticipated," Berenberg analysts wrote.

"This could prompt a more profound strategic reset under the incoming CEO," they added, referring to Milan Nedeljkovic, who took over from longtime leader Oliver Zipse last month.

Analysts have said BMW may cut capacity in Europe and accelerate efforts to localise production in North America and China.

Peter declined to comment on the financial outlook or broader strategy.

"Europe remains a pillar of our global export business," he said.

He warned the region risked getting bogged down in regulation, reiterating opposition to the European Union's proposed ban on new combustion-engine cars from 2035, which is now set to be watered down after objections from BMW and other carmakers.

In China, local brands dominate but there is still room for foreign automakers, Peter said.

"Much like how BMW is doing very well in the United States. There's still room for others," he said.

(Reporting by Gilles Guillaume. Additional reporting by Rachel More and Christoph Steitz. Writing by Makini Brice. Editing by Dominique Patton, Alexander Smith and Mark Potter)