Economic slowdown seems to have taken its toll on BMW, the world’s largest luxury car maker. The company has announced 89% drop in profits over the past 12 months.

Although BMW managed to avoid a loss with net annual profit of €330 million but its still way below analysts expectations which were expecting a figure around €1.02 billion mark.

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BMW sales have seen a massive crash in important markets like US, where the sales have dropped 37% to reach a 28 year low and Europe where sales are down 27%.

The drop in sales has hit revenues which have fallen by €53.2 billion, down 5% compared to last year. BMW group’s sales stand at 1,439,918 globally.

A part of BMW low profits is attributed to several exceptional items recorded in the last quarter of 2008 and the company has already started working on different strategies to change things.

The company has already initiated a long term plan called the ‘Number One’ in the US to streamline costs and increase efficiency. The strategy includes changing its outlook to focus more on profitability rather than sales volume.