BMW continues firmly on its course of profitable growth

Munich / Emirates Business

The BMW Group invested substantially in the mobility of the future during the first half of the year, while at the same time firmly continuing on its course of profitable growth. Rigorous implementation of the Group’s Strategy.
The BMW Group has also set a decisive course for its future in China, the company’s largest growth market.
“We continue to focus on following our own path and remain firmly on course. We are consistently preparing ourselves to meet the demands of tomorrow. This approach enables us to remain a reliable partner — all the more important during challenging times,” stated Harald Krüger, Chairman of the Board of Management of BMW AG, in Munich.
“The BMW Group has more than 100 years of experience in dealing with volatility in a changing world. Our vision remains clearly on long-term prospects. It is crucial that we remain focused on the key issues of profitability, growth and innovation to ensure our competitive edge going forward.”
As planned, this year the BMW Group has significantly increased its upfront expenditure on future mobility. Research and development expenses over the first six months of 2018 were more than €300 million higher than in the corresponding period one year earlier and totalled € 2,610 million. As previously reported, full-year R&D expenses are likely to reach up to seven percent of Group revenues in the current year.
In addition to ramping up production to drive the new model offensive, the BMW Group is focusing on expanding its activities in the fields of electric mobility and autonomous driving. In both cases, the BMW iNEXT will serve as a technological spearhead that sets new standards.
It will be presented to the public as a vision vehicle during the second half of 2018 and will be built at the Dingolfing plant from 2021 onwards. This underlines the significance of Germany as a key location for future technologies and a centre of competence for electric mobility.

Commitment in China
Over the past few weeks, the BMW Group has also taken numerous steps to expand its footprint and the scale of its commercial success in China. The BMW Group and Brilliance Automotive Group have agreed to further expand their joint venture BMW Brilliance Automotive (BBA) and, from 2020 onwards, to export the all-electric BMW iX3 (which will be manufactured by BBA) to markets outside of China.
BMW Group welcomes China’s commitment to a further opening of its markets and initiating reforms by lifting the foreign shareholding limit for automotive joint ventures for passenger vehicles as from 2022. However, it remains the BMW Group’s policy not to comment publicly on ongoing discussions with partners.
In addition to expanding the BBA joint venture, the BMW Group has signed an agreement with the Chinese manufacturer Great Wall Motor to produce electric MINI vehicles in China through a mutual 50:50 joint venture. As well as electric MINI vehicles, the “Spotlight Automotive Limited” joint venture will also produce electric vehicles for Great Wall Motor.
The establishment of the new company is subject to approval by the relevant Chinese authorities and the finalisation of business registration procedures.
The BMW Group is also investing in Europe, adding a new plant in Hungary to its existing production network and thereby maintaining a good balance in terms of global manufacturing between Asia, America and Europe.
“The decision to construct this new plant highlights the BMW Group’s prospects for growth,”” said Krüger.
“This new location will also produce vehicles powered by combustion engines and electrified drivetrains on the same production line.”
The BMW Group is developing worldwide into a mobility tech company and systematically expanding its expertise and capacities in the field of software development. To this end, during the second quarter the BMW Group signed an agreement with CRITICAL Software to form a joint venture called Critical TechWorks, subject to examination and approval by the relevant antitrust authorities.
The group’s stake in Critical TechWorks secures access to the know-how and skills of a highly successful European software development company, whose locations in Lisbon and Porto are witnessing dynamic growth in this sector. Meanwhile, the BMW Group continues to increase the number of people engaged in IT and software development in Germany and at its many other facilities around the world.
Second-quarter deliveries edged up by 0.7% to 637,878 units, while it was 633,582 units in 2017.
The excellent second-quarter sales performance means that BMW has now recorded growth in 35 consecutive quarters. The ramp-up of production of the BMW X3 in China and South Africa will enable the BMW Group to meet the high market demand for its coveted X models. This increased availability means the company expects sales growth to accelerate during the second half of the year.