Premium German carmaker BMW AG announced Friday, that due to a drastic downturn in car markets in past weeks it won’t be able to meet previously intended targets for 2008.  This is after seeing a decline of 33% in second quarter net profit.  BMW also announced that 2009 is also going to be a very difficult year.

BMW’s announcement was a surprise to the markets, especially since they brought out their earnings statement early, by four days.  They claimed that a drastic slide in used car prices means that they aren’t able to make the necessary returns on the vehicles they lease and then sell.  Also, new vehicle sales are falling in markets that are key due to the weak economy, consumers spending less, and harder financing conditions.

This warning comes soon after the announcement by the big three U.S. carmakers, General Motors, Chrysler, and Ford Motor Co, that they were forced to offer less-generous and fewer lease deals because of the used vehicle market deterioration.  In fact, GMAC LLC has planned to cut back their leasing business by half.

Consumers are apprehensive to purchase cars because of the weak economy and high gas prices.  They are already shelling out money for auto loans, used car warranties, and maintenance costs, and don’t want additional costs.  Unfortunately, the auto industry is suffering.