Record growth and more to come BMW Group

RECORD GROWTH AND MORE TO COME

The BMW Group achieved record sales in 2011 for all three brands – BMW, MINI and Rolls-Royce – and the number-one premium car company automotive giant is forecasting a further increase in sales in 2012. Felicity Landon reports.

BMW is expecting to grow ahead of the total market this year, and it’s aiming for a balanced distribution of sales between the Americas, Asia and Europe.

“With our sales momentum and our youngest ever product portfolio – only 2.3 years – we started 2012 with a solid foundation for strong growth,” says a corporate spokesperson. “We expect to grow faster than the total market, assuming that the total global automobile market will grow by 4 per cent in 2012.”

Of course, this depends on there being no further deterioration in economic conditions, he adds. “We expect to experience growth in virtually all regions of the world once again in 2012 and we expect growth trends in the emerging markets to continue in 2012. Above all, we aim for a balanced distribution of sales between the Americas, Asia and Europe.”

Norbert Reithofer, chairman of the board of management, has described 2011 as ‘the best year in the BMW Group’s corporate history’, with record sales volumes, revenues and earnings as the group exceeded its targets for the year.

Group revenues rose 13.8 per cent to €68.82 billion, and pre-tax profits were up by 52.1 per cent to €7.38 billion. The total number of BMW, MINI and Rolls-Royce brand cars delivered to customers increased by 14.2 per cent to a new record of 1,668,982.

Global growth in sales

While sales of BMW vehicles are stable in Europe, there is significant growth in Asia, particularly China, and the Americas. Regarding purchase choices in these regions, BMW says: “Customers purchase high-end models like the BMW 7 Series, 6 Series and X5/X6 in China, which is our biggest market for BMW 5 and 7 Series sales. If you consider the rest

of Asia, the BMW 5 and 3 Series are in highest demand and sales are on a similar level for both vehicles.”

While BMW’s core buyer groups in Asia remain focused on the traditional concept of saloon, coupe and convertibles, the group is seeing a definite market potential for new body concepts such as the BMW X1 (a crossover concept) and the all-new BMW 1 Series (hatchback), says BMW.

“In the Americas, meanwhile, the BMW 3 Series is very clearly the strongest-selling model. There is also strong demand for the BMW 5 Series, as well as Sports Activities Vehicles.”

Strong production network

BMW has a ‘highly flexible, highly efficient’ network of 25 production facilities in 14 countries, and that is clearly a vital part of the group’s global success.

“Despite the steadily growing number of different models, our production network is so flexible that each plant can build different models and variants,” explains BMW. “Global growth is being met by increasing capacities in various regions, including the USA, China and India. We are also investing some €2 billion in our German production sites throughout 2011 and 2012.”

As for any expansion of the production network, particularly in eastern Europe, BMW says: “Our guiding principle has always been that production should follow the market. That is why we have had local production in Russia since 1999. Russia is one of the

attractive growth markets for the BMW Group and we intend to further expand our activities in the Russian market over the long term. We are involved in constructive dialogue with our partner Avtotor about our further involvement in the market.”

Elsewhere, BMW is in talks with the Brazilian authorities about building a plant in Brazil. “We have to wait until they decide how favourable conditions will be for foreign automakers to bring production to the country, before we make a decision,” says a corporate spokesperson.

Are protectionist measures, especially in China, of concern for BMW? “Overall, in many growth markets, we are seeing an increase in measures aimed at increasing local value creation and the localisation of automobile manufacturers,” he says. “In such cases, we aim for constructive dialogue with the respective government agencies. In China we are not perturbed by the situation and are expecting continued growth in retail this year.”

Meanwhile, other investments continue. BMW is to further expand its plant in South Carolina, in the USA, where the X range is produced – reflecting confidence that there is a growing market for premium SUV type vehicles worldwide. In Europe, an investment of €400 million is planned at the Leipzig plant to produce the new BMW i electric and hybrid vehicles.

“Leipzig will be our competence centre for the production of emission-free electric cars. We have ambitious goals when it comes to environmental protection and conservation of natural resources: to reduce energy consumption used in the production of each vehicle by 50 per cent and water consumption by 70 per

cent. We also intend to obtain 100 per cent of the energy used in the assembly process from renewable energy sources. Electric and hybrid vehicles play an integral role in our strategy for sustainable mobility, alongside the continual improvement of our combustion engines,” says BMW.

In parallel to record car sales, BMW Motorrad delivered more motorcycles than ever before last year, increasing its market share by more than 12 per cent in the segment above 500cc. This year has started well, with sales up 5.6 per cent in the first two months.

“Our plant in Berlin will remain our motorcycle production facility. We are continually investing there to accommodate the production of future models, as well as to improve efficiency. The production capacity is currently sufficient (a maximum of 600 vehicles per day) but, depending upon further growth, we will consider if further investment is necessary,” says BMW.

New vehicle concepts

Meanwhile, BMW continues to lead the way in its new vehicle designs. It says the new 3 Series Sedan, the sixth generation of the world’s best-selling premium vehicle, ‘sets new benchmarks in terms of sporting prowess, elegance and comfort’.

“It possesses an even more dynamic and elegant design than before and is now also available in a trio of trim and equipment variants – the Sport Line, Luxury Line and Modern Line,” says BMW. “Each presents its own individual take on the character of the sports sedan, with exclusive, high-quality material combinations and unbeatable build quality underlining the premium ambience of the new range.”

All engines in the new BMW 3 Series are equipped with the latest BMW TwinPower Turbo Technology and all engines can be combined with an eight-speed automatic gearbox; BMW is the first carmaker to offer an eight-speed automatic gearbox in the premium mid-size segment. BMW ConnectedDrive offers an ‘unmatched’ combination

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Cooperation with Toyota

At the end of 2011, BMW signed an MoU with Toyota Motor Corporation for mid-to long-term cooperation on next-generation environment-friendly technologies. The two companies will collaborate on basic research in the field of lithium-ion battery technologies and have also agreed to look at other possible projects for cooperation.

In addition, the BMW Group and Toyota Motor Europe (TME), Toyota’s European subsidiary, have agreed for BMW to supply 1.6 litre and 2.0 litre diesel engines to TME, starting in 2014. The engines will be installed in certain Toyota-brand vehicles sold in Europe.

“Toyota plans to use these engines to expand its European line-up and increase sales of fuel-efficient, low CO2-emission vehicles. With this move, we are combining our resources to advance development of environmental technologies and promote our innovation leadership in the respective segments. The delivery of our efficient, dynamic diesel engines to Toyota is part of the planned expansion of our marketing of drive systems,” says a BMW Group spokesperson.

Manufacturers today are essentially in constant discussion with one another, he says. “Technical challenges must be mastered in parallel.” n

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