aroq bmw profile 2005ed1

8/3/2019 Aroq Bmw Profile 2005ed1

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2004 All content copyright Arog Ltd. All rights reserved.

BMW AG:

2005 company profile edition 1


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BMW AG:2005 company profile edition 1

April 2005

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Page iii

Table of contents

Single-user licence edition.......................................................................................... ii

Copyright statement ..................................................................................................iiTable of contents ........................................................................................................ iiiList of tables................................................................................................................ ivList of figures ...............................................................................................................vjust-auto.coms research portfolio............................................................................ vi

Incredible ROI for your budget single and multi-user licences..............................vi just-auto.com membership ....................................................................................... viiChapter 1: Company Dossier...................................................................................... 1Chapter 2: Worldwide Locations ................................................................................ 4Chapter 3: Financial Analysis ..................................................................................... 5Chapter 4: Competitor Analysis ................................................................................ 6Chapter 5: Key Events............................................................................................... 7Chapter 6: SWOT Analysis.......................................................................................... 9

Strengths.................................................................................................................. 9Weakness ................................................................................................................ 9Opportunities.......................................................................................................... 10Threats ................................................................................................................... 10

Chapter 7: Customers.............................................................................................. 11Chapter 8: Products................................................................................................... 13Chapter 9: Product Development ............................................................................. 15Chapter 10: Prospects...............................................................................................17Online sources of information.................................................................................. 19

Free email newsletters ........................................................................................... 19Other research reports ........................................................................................... 19Global news and feature articles ............................................................................ 19Search the web ...................................................................................................... 19

Your feedback ............................................................................................................ 20



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Page iv

List of tables

Table 1: BMWs key automobile production plants worldwide ................................. 4

Table 2: BMWs key financial performance, 2000-2004........................................... 5

Table 3: BMW key products across its automobile brands .................................... 13



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Page v

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 multi-

brand 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

BMWs common stock is traded on the DAX Index and the Prime Automobile

Performance Index. The International Securities Identification Number (ISIN) of the

companys 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 Gschel, Development

Stefan Krause, Finance

Dr. - Ing. Norbert Reithofer, Production



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Summary Financials

In millions 2002 2003 2004

Group Sales XX,XXX XX,XXX XX,XXXAutomobile Segment sales XX,XXX XX,XXX XX,XXXNet profit (loss) X,XXX X,XXX X,XXX

Total assets XX,XXX XX,XXX XX,XXXSource: BMW

Key Competitors

BMWs arch-rival in the premium car segment in USA and Europe is DaimlerChryslers

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 companys

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

BMWs ultra premium Rolls-Royce brand are DaimlerChryslers 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



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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 companys 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: BMWs key automobile production plants worldwide

Country PlantBerlin plantDingolfing plant

Landshut plant

Germany

Munich plantHams Hall plantOxford plant

UK

Swindon plantUSA Spartanburg plantChina BMW Brilliance Automotive Ltd, Shenyang (joint venture with Brilliance

China Automotive Holdings)Brazil 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 Segments profit before taxes for 2004

amounted to X,XXX million, an increase of XX.X% over 2003.

Table 2: BMWs key financial performance, 2000-2004

(in millions, except employee figures) 2000 2001 2002 2003 2004

Group Sales XX,XXX XX,XXX XX,XXX XX,XXX XX,XXXAutomobiles Segment sales XX,XXX XX,XXX XX,XXX XX,XXX XX,XXXProfit from ordinary activities X,XXX X,XXX X,XXX X,XXX X,XXXNet profit (loss) X,XXX X,XXX X,XXX X,XXX X,XXXCapital Expenditure X,XXX X,XXX X,XXX X,XXX X,XXXTotal Assets XX,XXX XX,XXX XX,XXX XX,XXX XX,XXXNumber of Employees XX,XXX XX,XXX XX,XXX XX,XXX XX,XXX

Source: BMW



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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 companys arch-rival in the premium car segment in USA and

Europe is DaimlerChryslers 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 companys 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 BMWs ultra premium Rolls-Royce brand are

DaimlerChryslers 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 Rapps 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.

BMWs 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 Coup 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 companys Spartanburg

plant in the USA. Also, production commenced at the companys 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

BMWs strategy to involve its business partners in the form of a supplier web.



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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 EUs 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 companys 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, BMWs 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 Unterschleiheim, 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

BMWs 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.



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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 worlds 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.

BMWs 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 third-

largest market for BMWs 7 Series luxury limousines. BMW predicts that robust growth

will place China among the companys seven largest markets in a few more years. Thisis 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 BMWs

topline thereby tempering its profitability.

The rising price of raw materials such as steel threatens to offset the companys

earnings.



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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.



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Chapter 7 Customers Page 12

Figure 1: Key automobile markets for BMW Group, 2003-2004 (as % of sales)

2003

USA

XX.X%

Italy

X.X%

Japan

X.X%

France

X.X%

Other

XX.X%

United

KingdomXX.X%

Germany

XX.X%

2004

USA

XX.X%

Italy

X.X%

Japan

X.X%

FranceX.X%

Other

XX.X%

United

Kingdom

XX.X%

Germany

XX.X%

Market 2003 2004

USA XX.X XX.XGermany XX.X XX.XUnited Kingdom XX.X XX.XItaly XX.X XX.XJapan XX.X XX.XFrance XX.X XX.XOther XX.X XX.X

Source: BMW



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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 Groups automobile

brands.

Table 3: BMW key products across its automobile brands

BMW Brand Mini Brand Rolls-Royce Brand

BMW 1 Series MINI One Rolls-Royce PhantomBMW 3 Series models

Sedan Convertible Coup Compact Touring

MINI One D Rolls-Royce 100EX(CentenaryExperimental Car)

BMW 5 Series 525i Sedan 530i Sedan 545i Sedan

BMW 6 Series models Coup Convertible BMW Individual 6 Series

Convertible BMW Individual 6 Series

Coup

MINI Cooper Rolls-Royce Phantom(Centenary model), limitededition

BMW 7 Series models Sedan Security vehicle

MINI Cooper S

BMW X3 Series (X3) MINI One CabrioBMW X5 models

X5 Security vehicle

BMW Z4 (Z4) MINI Cooper CabrioBMW M models

M3 Coup M3 Convertible

MINI Cooper S Cabrio



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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 worlds

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 valvedrive.

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 powerfuldiesel 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

worlds 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



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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--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 BMWs successful entry into the compact

vehicle category. BMWs 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 Coup, 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

companys topline.



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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 companys earnings in the foreseeable

future.



27/28

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