In the future, today’s BMW annual conference might well be seen as a turning point for premium car brands. This year, 2016, could mark ‘peak product’ for the hugely profitable German three as they run out of new markets, new customers and new product niches to exploit.
True, BMW sold a highly impressive 2.24 million cars in 2015, growth of a healthy 6%. Net profit was up by around 10% to 6.4bn euros (£5bn) and the company’s EBIT profit margin was very solid at 9.2%.
Perhaps the most interesting part of BMW’s statement this morning what the company calls "substantial risks and uncertainties" in the global political and environmental situation.
BMW lists these as "the high public debt in many countries, the current instability within Europe, the normalisation of the Chinese market and the difficult economic situations in some emerging markets".
If not for the fact that it's Budget day in the UK, I’m sure the national papers would be decoding BMW’s comment about Europe as being as much about the chance of the UK leaving the European Union as about the migrant crisis.
But BMW makes it quite clear in these four concerns just how big the hurdles are for the premium car makers. And while the instability in Europe and the emerging markets may calm in the short to medium term, the high debt and slowing of growth in China won’t.
‘Slight increase in automotive sales’
Indeed, despite BMW growing by just under 8% in the first two months of 2016, the official outlook for the whole year is just "a slight increase in automotive sales".
Rather than the usual announcements of new products and expansion into new niches, company CEO Harald Krüger’s offer was a modest one.
There’ll be an open-top i8, an i3 with a bigger battery pack and a plug-in hybrid Mini. And BMW will finally launch the on-off seven-seat X7 SUV. Aside from offering high-profit, high-end trim packages on more of its models, that was about it for the near term.
The company says its new strategy is known as ‘BMW VISION NEXT 100’. Krüger said it "offers a vision of how we believe mobility in the next 30 years and beyond will develop… a new era of mobility – a time that will be characterised by sustainability, connectivity and automated driving".
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BMW The Future
What a load of rubbish
Tesla fans logic
Not that most of these Tesla fans can ever afford a Tesla, but that never stops them from thinking it's the best car in the world for everybody. It's as stupid as an ICE-car fan would suggest everybody should buy a S-class because it's the best car in the world. No worries that almost nobody can afford it :)
Needs to go electric