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BMW AG:
2005 company profile edition 1
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BMW AG:
2005 company profile edition 1
April 2005
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Table of contents
Single-user licence edition.......................................................................................... ii
Copyright statement ..................................................................................................ii
Table of contents ........................................................................................................ iii
List of tables ................................................................................................................ iv
List of figures ............................................................................................................... v
just-auto.com’s research portfolio ............................................................................ vi
Incredible ROI for your budget – single and multi-user licences ..............................vi
just-auto.com membership ....................................................................................... vii
Chapter 1: Company Dossier...................................................................................... 1
Chapter 2: Worldwide Locations ................................................................................ 4
Chapter 3: Financial Analysis ..................................................................................... 5
Chapter 4: Competitor Analysis ................................................................................ 6
Chapter 5: Key Events ............................................................................................... 7
Chapter 6: SWOT Analysis.......................................................................................... 9
Strengths.................................................................................................................. 9
Weakness ................................................................................................................ 9
Opportunities.......................................................................................................... 10
Threats ................................................................................................................... 10
Chapter 7: Customers.............................................................................................. 11
Chapter 8: Products................................................................................................... 13
Chapter 9: Product Development ............................................................................. 15
Chapter 10: Prospects ............................................................................................... 17
Online sources of information .................................................................................. 19
Free email newsletters ........................................................................................... 19
Other research reports ........................................................................................... 19
Global news and feature articles............................................................................ 19
Search the web ...................................................................................................... 19
Your feedback ............................................................................................................ 20
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Page iv
List of tables
Table 1: BMW’s key automobile production plants worldwide ................................. 4
Table 2: BMW’s key financial performance, 2000-2004........................................... 5
Table 3: BMW key products across its automobile brands .................................... 13
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List of figures
Figure 1: Key automobile markets for BMW Group, 2003-2004 (as % of sales).... 12
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Chapter 1 Company Dossier
Page 1
Chapter 1: Company Dossier
Company name
Bayerische Motoren Werke Aktiengesellschaft (BMW)
Business activity
BMW Group, headquartered in Munich, Germany, is one of the most successful multibrand premium automobile manufacturers in the world. The company manufactures,
distributes and sells passenger cars (including Sedans, Coupes, and Convertibles etc)
and motorcycles. BMW operates three business segments namely: Automobiles,
Motorcycles and Financial Services. In the fiscal ended December 31, 2004, the BMW
group posted sales of €44,335 million, an increase of 6.8% over the previous fiscal.
Stock symbol
BMW’s common stock is traded on the DAX Index and the Prime Automobile
Performance Index. The International Securities Identification Number (ISIN) of the
company’s common stock is DE0005190003. The German Securities Code Number of
BMW common stock is 519 000.
Key executives
Dr. Helmut Panke, Chairman of the Board of Management of BMW AG
Ernst Baumann, Human Resources, Industrial Relations Director
Dr. Michael Ganal, Sales and Marketing
Prof. Dr. – Ing. Burkhard Göschel, Development
Stefan Krause, Finance
Dr. - Ing. Norbert Reithofer, Production
© 2004 All content copyright Aroq Ltd. All rights reserved.
Chapter 1 Company Dossier
Page 2
Summary Financials
In € millions
Group Sales
Automobile Segment sales
Net profit (loss)
Total assets
2002
XX,XXX
XX,XXX
X,XXX
XX,XXX
2003
2004
XX,XXX
XX,XXX
XX,XXX
XX,XXX
X,XXX
X,XXX
XX,XXX
XX,XXX
Source: BMW
Key Competitors
BMW’s arch-rival in the premium car segment in USA and Europe is DaimlerChrysler’s
Mercedes Car Group. Other main competitors of BMW in Western Europe include
Volkswagen (Audi, VW, Bentley), Fiat (Lancia, Ferrari, Alfa Romeo, Maserati), Ford
(Jaguar, Land Rover, Aston Martin, Volvo), General Motors (Opel, Saab, Vauxhall),
Porsche, Renault, Toyota (Lexus), PSA (Peugeot/Citroen) etc. In USA, the company’s
major competitors include Ford (mainly the Lincoln luxury brand), Nissan (Infiniti), Honda
(Acura), Toyota (Lexus), Porsche, Volkswagen (Audi, VW, Bentley), and some of the
models manufactured by General Motors (Saab, Cadillac). The principal competitors of
BMW’s ultra premium Rolls-Royce brand are DaimlerChrysler’s Maybach brand and
Bentley sedans.
Outlook
Despite the challenging economic conditions, BMW reported 2004 as the most
successful year in its history due to record sales volume and earnings. The Automobiles
segment reported a profit of €X,XXX million from ordinary activities, an impressive
increase of XX.X% over 2003. BMW predicts that the premium car segments will
experience stronger growth than the volume segment over the coming years. In this
backdrop, BMW is looking at further expanding its presence in both traditional and new
markets. BMW expects earnings in 2005 to match those of 2004 as the high steel prices
and the weak dollar will offset increase in sales volume. However, BMW is confident of a
sales volume increase in 2005 across all its brands. On the production front, BMW is all
set to vamp up its manufacturing capabilities to aid production of new models over the
© 2004 All content copyright Aroq Ltd. All rights reserved.
Chapter 1 Company Dossier
Page 3
coming years. However, the continuing fall of the dollar and the increase in price of raw
materials are two pressing factors that threaten to temper the company’s earnings in the
foreseeable future.
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Chapter 2 Worldwide Locations
Page 4
Chapter 2: Worldwide Locations
Headquartered in Munich, Germany, the BMW Group has XX production and assembly
plants across the world. The company also has XX sales subsidiaries and a research
and development (R&D) network. The BMW Group employed XXX,XXX people as of
December 31, 2004. The following table illustrates some key BMW Group production
plants across the world.
Table 1: BMW’s key automobile production plants worldwide
Country
Germany
UK
USA
China
Brazil
Plant
Berlin plant
Dingolfing plant
Landshut plant
Munich plant
Hams Hall plant
Oxford plant
Swindon plant
Spartanburg plant
BMW Brilliance Automotive Ltd, Shenyang (joint venture with Brilliance
China Automotive Holdings)
TRITEC Motors Ltda, Curitiba (joint venture with DaimlerChrysler)
Source: BMW
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Chapter 3 Financial Analysis
Page 5
Chapter 3: Financial Analysis
In the fiscal year 2004, the BMW group posted revenues of € XX,XXX million, an increase
of X.X% over the previous fiscal. The Automobiles segment contributed €XX,XXX million
(or approximately XX%) of total Group sales. The sales of the Automobiles Segment rose
by XX% over fiscal 2003. The rise in sales of the Automobiles Segment was primarily
due to the increase in number of cars sold in 2004. BMW sold X,XXX,XXX cars in 2004,
an increase of X.X% over 2003. Automobiles Segment’s profit before taxes for 2004
amounted to €X,XXX million, an increase of XX.X% over 2003.
Table 2: BMW’s key financial performance, 2000-2004
(in € millions, except employee figures)
Group Sales
Automobiles Segment sales
Profit from ordinary activities
Net profit (loss)
Capital Expenditure
Total Assets
Number of Employees
© 2004 All content copyright Aroq Ltd. All rights reserved.
2000
XX,XXX
XX,XXX
X,XXX
X,XXX
X,XXX
XX,XXX
XX,XXX
2001
XX,XXX
XX,XXX
X,XXX
X,XXX
X,XXX
XX,XXX
XX,XXX
2002
XX,XXX
XX,XXX
X,XXX
X,XXX
X,XXX
XX,XXX
XX,XXX
2003
2004
XX,XXX XX,XXX
XX,XXX XX,XXX
X,XXX X,XXX
X,XXX X,XXX
X,XXX X,XXX
XX,XXX XX,XXX
XX,XXX XX,XXX
Source: BMW
Chapter 4 Competitor Analysis
Page 6
Chapter 4: Competitor Analysis
BMW is a supplier of premium cars and primarily serves customers in the high price and
high quality segment. The company’s arch-rival in the premium car segment in USA and
Europe is DaimlerChrysler’s Mercedes Car Group. Other main competitors to BMW in
Western Europe include Volkswagen (Audi, VW, Bentley), Fiat (Lancia, Ferrari, Alfa
Romeo, Maserati), Ford (Jaguar, Land Rover, Aston Martin, Volvo), General Motors
(Opel, Saab, Vauxhall), Porsche, Renault, Toyota (Lexus), PSA (Peugeot/Citroen), etc.
In the USA, the company’s major competitors include Ford (mainly the Lincoln luxury
brand), Nissan (Infiniti), Honda (Acura), Toyota (Lexus), Porsche, Volkswagen (Audi,
VW, Bentley), and some of the models manufactured by General Motors (Saab,
Cadillac). The principal competitors of BMW’s ultra premium Rolls-Royce brand are
DaimlerChrysler’s Maybach brand and Bentley sedans.
In USA, which is the largest market for luxury cars, the BMW brand saw its market share
increase to X.X% in 2004, from X.X% in 2003. During the same period Mercedes-Benz's
market share remained the same X.X%. In Western Europe, the market share of BMW
increased from X.X% in 2003 to X% in 2004, while Mercedes-Benz's share fell from X.X%
to X.X%. Moreover, BMW is waging a pitched battle against Toyota's Lexus division for
overall sales leadership in traditional luxury brands in the USA. The Rolls-Royce
Phantom is still the market leader in the luxury car segment. The key international
competitors for BMW in the buoyant Chinese market include DaimlerChrysler,
Volkswagen and Ford.
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Chapter 5 Key Events
Page 7
Chapter 5: Key Events
The history of BMW can be traced to the establishment of Rapp-Motorenwerke by Karl
Rapp in Munich (Germany) in 1913. The company initially produced aircraft engines.
The modern day Bayerische Motoren Werke (BMW) officially came into existence in
1917, when Max Friz and Franz-Josef Popp took over Karl Rapp’s business. The
following year the company went public. The first factory of BMW was constructed in
Neulerchenfeldstrasse, Germany. In 1928, BMW purchased the Eisenach/Thuringia car
factory along with the license to construct a small car named Dixi. In 1940, the company
commissioned a streamlined body for the famed sports car of the period, Mille Miglia.
BMW entered the small car segment with the Isetta in 1956. The company released its
first sporty family sedan, the new 1500 in 1961. In 1966, BMW purchased the ailing Glas
Company and converted Dingofling into its biggest plant over the following years.
BMW’s first 5 Series car was launched in 1972. During the same year BMW Motorsport
GmbH was founded. Almost a decade later, BMW became the first European company
to set up a subsidiary in Japan. In 1986, the company unveiled the BMW 745i, which
was the first European car to be equipped with an internal fuel preparation and liquid
hydrogen tank. The 8501 Coupé was launched in 1989. Also during the year, BMW
acquired the process engineering specialist, Kontron GmbH.
More than a decade later, in 2001, BMW took several steps to expand its capacity.
Production of the BMW X5 was increased by over XX% at the company’s Spartanburg
plant in the USA. Also, production commenced at the company’s Hams Hall plant in
Great Britain. BMW decided to construct a new plant in the Leipzig/Halle region, with an
investment of €X.X billion. In 2002, to derive full advantage of the market potential in
Poland at the time, BMW set up its own sales company there. In the latter half of 2002,
BMW initiated restructuring of its European sales network following the Block Exemption
Regulation (BER) passed by the European Union (EU) commission.
In 2003, the BMW Group Partner portal went online. This portal helps to integrate
suppliers and development partners into the work processes of the Group. It was part of
BMW’s strategy to involve its business partners in the form of a ‘supplier web’.
© 2004 All content copyright Aroq Ltd. All rights reserved.
Chapter 5 Key Events
Page 8
A very significant event in 2003 was that the BMW Group added the Rolls-Royce brand
to its portfolio. Also during the year, BMW took over direct market responsibility in
Ireland, Greece, Luxembourg, and Denmark, as part of its strategy to expand its
international market presence. The strategy came into effect from October 1, 2003,
around the same time as the EU’s BER came into force. Towards the end of 2003, BMW
announced that the company was appointing individual brand managers for each of its
BMW, Mini, and Rolls-Royce brands. The move was part of the company’s attempt to
strengthen the Group brands after successfully adding Mini and Rolls-Royce to its brand
portfolio during the preceding three years. The appointments came into effect on
January 1, 2004.
In April, 2004, BMW commenced the production of the BMW X5 4.8is at its Spartanburg
plant in the USA. In May 2004, BMW’s new plant in Shenyang (China), a joint venture
with Brilliance Automotive Holdings, was officially inaugurated. BMW opened a Sales
and After-Sales Training Academy in Unterschleißheim, Germany. This facility has the
capacity to train over 10,000 individuals annually. With its BMW 1 Series launched in
September 2004, BMW entered the compact class segment. For the first time the
company offered a convertible equipped with a diesel engine when it launched its new
BMW 320Cd Convertible
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Chapter 6 SWOT Analysis
Page 9
Chapter 6: SWOT Analysis
Strengths
Worldwide, the BMW Group is one of the most successful multi-brand premium car
manufacturer in the automobile industry. The Rolls-Royce phantom holds the number
one position in the super-luxury car segment. Moreover, BMW is the only automobile
manufacturer possessing three non-overlapping premium car brands in its portfolio.
The BMW group on an average spends around X% of its revenues on R&D, which is one
of the highest in the industry. The keen focus on R&D is evidenced by the number of
new models the Group has released over the past few years. Thanks to its R&D efforts,
BMW has also developed an innovative array of engines such as the Hydrogen – H2R (1
and 2) Hydrogen Combustion Engine, the Straight-six petrol engine –3 etc.
Weakness
BMW’s heavy cost German base might affect the profitability of the company in the long
run as more and more competitors shift product development activities to lower cost
countries. BMW might be forced to negotiate a way to maintain cost competitiveness
and its reputation for German engineering excellence.
© 2004 All content copyright Aroq Ltd. All rights reserved.
Chapter 6 SWOT Analysis
Page 10
Opportunities
The expansion of the European Union (EU) to XX countries from XX countries in May 2004,
has converted the EU into the world’s biggest trading bloc with a combined population of
around
million. This offers ample opportunities for BMW to leverage its strong
European position in the premium car segment to garner more market share across new
and expanding markets.
BMW’s concerted forays into the Chinese luxury car market portends to an increase in
the earnings of the company over the coming years. China already ranks as the thirdlargest market for BMW’s 7 Series luxury limousines. BMW predicts that robust growth
will place China among the company’s seven largest markets in a few more years. This
is a significant improvement over the 12th position held by the Chinese market for BMW
in 2002.
Threats
The continuing decline of the dollar against the euro threatens to undercut BMW’s
topline thereby tempering its profitability.
The rising price of raw materials such as steel threatens to offset the company’s
earnings.
© 2004 All content copyright Aroq Ltd. All rights reserved.
Chapter 7 Customers
Page 11
Chapter 7: Customers
Overall, the BMW group sold X,XXX,XXX cars spanning all its brands in 2004, an increase
of X.X% over 2003. The USA remained the largest market with BMW selling a total of
XXX,XXX cars in that country. This represented an increase of X% over the sales volume
achieved in 2003. It is notable that no European manufacturer of premium cars sold
more cars in the US market in 2004 than BMW. In Western Europe, sales increased by
XX,X% in 2004 to XXX,XXX units. Germany alone registered sales of XXX,XXX units, an
increase of XX.X% over 2003. Over the last five years, BMW has more than doubled its
sales in the UK. In 2004, XXX,XXX units were sold in the UK, an increase of X% over
2003. The total number of cars sold in Asia in 2004 was XX,XXX units, an increase of
X.X%. Over half of this quantity was sold in Japan, where XX,XXX units were sold. Japan
registered an increase in sales of X.X% in 2004, over 2003.
© 2004 All content copyright Aroq Ltd. All rights reserved.
Chapter 7 Customers
Page 12
Figure 1: Key automobile markets for BMW Group, 2003-2004 (as % of sales)
2003
USA
XX.X%
Other
XX.X%
France
X.X%
Germany
XX.X%
Japan
X.X%
Italy
X.X%
United
Kingdom
XX.X%
2004
USA
XX.X%
Other
XX.X%
France
X.X%
Germany
XX.X%
Japan
X.X%
Italy
X.X%
Market
USA
Germany
United Kingdom
Italy
Japan
France
Other
© 2004 All content copyright Aroq Ltd. All rights reserved.
United
Kingdom
XX.X%
2003
XX.X
XX.X
XX.X
XX.X
XX.X
XX.X
XX.X
2004
XX.X
XX.X
XX.X
XX.X
XX.X
XX.X
XX.X
Source: BMW
Chapter 8 Products
Page 13
Chapter 8: Products
The BMW Group is one of the most successful multi-brand premium car manufacturers
in the automobile industry. The BMW and Rolls-Royce brands of the company serve the
premium and ultra premium segments of the automobile market. The BMW brand
includes Sedans, Coupes, Tourings, Compacts, etc. The company sells small cars
through its Mini premium brand.
The following table illustrates key vehicle ranges under each of the Group’s automobile
brands.
Table 3: BMW key products across its automobile brands
BMW Brand
BMW 1 Series
BMW 3 Series models
• Sedan
• Convertible
• Coupé
• Compact
• Touring
BMW 5 Series
• 525i Sedan
• 530i Sedan
• 545i Sedan
BMW 6 Series models
• Coupé
• Convertible
• BMW Individual 6 Series
Convertible
• BMW Individual 6 Series
Coupé
BMW 7 Series models
• Sedan
• Security vehicle
BMW X3 Series (X3)
BMW X5 models
• X5
• Security vehicle
BMW Z4 (Z4)
BMW M models
• M3 Coupé
• M3 Convertible
Mini Brand
MINI One
MINI One D
Rolls-Royce Brand
Rolls-Royce Phantom
Rolls-Royce 100EX
(Centenary
Experimental Car)
MINI Cooper
Rolls-Royce Phantom
(Centenary model), limited
edition
MINI Cooper S
MINI One Cabrio
MINI Cooper Cabrio
MINI Cooper S Cabrio
© 2004 All content copyright Aroq Ltd. All rights reserved.
Chapter 8 Products
•
•
•
Page 14
M5
M5 Individual
M6
Source: BMW
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Chapter 9 Product Development
Page 15
Chapter 9: Product Development
In 2004, BMW incurred R&D costs of €XX,XXX million, an increase of XX.X% over 2003.
Preparations for new models and engines were the key focus of R&D at BMW Group in
2004. Recent technological development initiatives of BMW include the following:
•
Hydrogen – H2R (1 and 2) Hydrogen Combustion Engine: BMW is the world’s
first car manufacturer to prepare medium and long term development of its
vehicles in alignment with a hydrogen-based operation. The major aim of this
concept called BMW CleanEnergy is to eradicate emissions and to utilise
regenerative sources of energy. The H2R is based on the petrol engine of BMW
760i and features advanced technologies such as fully variable Valvetronic valve
drive.
•
V10 engine – 2: The V10 is claimed to be the most powerful BMW engine till
date. It has a maximum engine speed of 8,250 rpm. The engine helps in lower
fuel consumption and increased power output.
•
Variable Twin Turbo Diesel –1: The Variable Twin Turbo Technology comes
armed withy multi-stage charging and is touted to be one of the most powerful
diesel engine in its class. The engine comes with two varied sized and
successively activated turbo-chargers. The engine was fitted to the BMW 535d
Sedan and the 535d Touring.
•
Straight-six petrol engine –3: The three-litre, straight-six power unit is the
world’s lightest six-cylinder engine. Continuously variable valve control or the
VALVETRONIC ensures fuel economy and powerful torque at low engine speeds
also.
•
Seven-speed SMG transmission: The Seven-speed SMG transmission
provides eleven gearshift options ranging from comfortable cruising with
automatic gear selection to rapid gearshifts for sporty driving. The system also
© 2004 All content copyright Aroq Ltd. All rights reserved.
Chapter 9 Product Development
Page 16
features Launch Control, a maximum acceleration programme inspired by
Formula 1.
•
Second-generation ActiveSteering: This new system alters the steering ration
vis-à-vis driving situation requirements. The system also automatically stabilises
the vehicle resulting in more safety and comfort.
•
xDrive all-wheel-drive system –1: The xDrive system acts before the wheels
start to lose their grip unlike conventional all-wheel drive systems that require at
least one of the wheels to be spinning. In the new system, an electronically
controlled multi-plate clutch transfers power between the front and rear axles,
thus facilitating optimum traction and sporty driving.
•
MINI Convertible soft top system –2: The MINI Convertible allows the front
section of the soft top to open and close at the touch of a button.
During 2004, BMW introduced a number of vehicle models that include the BMW 1
Series, the BMW X3 Sports Activity Vehicle, the BMW 6 Series Convertible, the MINI
Convertible etc. The BMW 1 Series marked BMW’s successful entry into the compact
vehicle category. BMW’s new BMW M5, was presented in the autumn of 2004 and is
slated to hit the market in April 2005. Various models have been lined up to hit the
market during the first half of 2005. The line up includes the new BMW 3 Series, the new
BMW M6, and the revised BMW 7 Series. The MINI brand was also augmented with the
MINI Convertible, which is now available in three engine options.
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Chapter 10 Prospects
Page 17
Chapter 10: Prospects
In 2004, for the first time in the history of BMW, its brand exceeded the sales threshold
of one million by registering sales of X,XXX,XXX cars during the year. A number of new
models were released in 2004 including the BMW 5 Series Touring in Europe, the BMW
6 Series Coupé, the Convertible models, the BMW X3, etc. Through the introduction of
new models, the Group has gained access to new customer groups. Despite challenging
economic conditions, BMW reported 2004 as the most successful in its history due to
record sales volume and earnings. The Automobiles segment reported a profit of €X,XXX
million from ordinary activities, an impressive increase of XX.X% over 2003.
Across the world, the economic momentum which characterised the first half of 2004
slowed down visibly as the year progressed. Global growth is expected to be burdened
by high raw material and oil prices coupled with more restraining economic policies. The
economies of USA, Japan and other emerging economies such as Latin America and
Asia are expected to post moderate economic growth rates. While the Euro region is
likely to recover at a moderate pace, the German economy is expected to decline
marginally. With respect to the auto industry, while some growth is expected in the
traditional markets of Europe and Japan, growth is expected to be flat in the largest
luxury car market of USA. However, the major emerging markets of Asia and Latin
America are expected to witness a robust growth in terms of total number of vehicles
sold.
BMW predicts that the premium car segment will experience stronger growth than the
volume segment over the coming years. In this backdrop, BMW is looking to further
expand its presence in both traditional and new markets. BMW also expects earnings in
2005 to match those of 2004 as the high steel prices and the weak dollar offset increase
in sales volume. However, BMW is confident of an increase in sales volume in 2005
across all its brands. A number of new models were set to be launched in 2005 such as
the refined BMW 3 series, the 2005 BMW Z4, the 2005 BMW 7 series etc. The high
number of models set to be launched during the year is expected to boost the
company’s topline.
© 2004 All content copyright Aroq Ltd. All rights reserved.
Chapter 10 Prospects
Page 18
On the production front, BMW is all set to vamp up its manufacturing capabilities to aid
production of new models over the coming years. Overall, the company is set to invest
over £XXX million in production facilities in Oxford, UK by 20XX. Further, the company
has decided to invest €XXX million in its Steyr engine facility over the coming years.
Other important areas of capital expenditure also include the BMW plant coming up in
Leipzing, Germany and modifications carried out at the Spartanburg (USA) plant.
However, the continuing fall of the dollar and the increase in price of raw materials are
two pressing factors that threaten to temper the company’s earnings in the foreseeable
future.
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