The BMW Group verifies improved performance for 2020

The BMW Group verifies an increase in sales volume and net profit in this year’s third quarter. And at the ninth-month stage, BMW Group looks forward to meeting its targets in 2020. Increased regional demands and their attractive model portfolio contributed to their financial success. Moreover, cash management and cost efficiency helped them cope with the corona pandemic and its impacts.

Oliver Zipse, Chairman of the Board of Management of BMW AG, verifies Group’s impressive performance and its outlook. He noted that this success shows BMW Group’s abilities to perform well even within a touch environment. By improving the Group’s earnings, they are confident about achieving their targets this 2020. Zipse shared that they manage their operations every day and considers regional demand fluctuations as priorities. Also, they assure a quick response to changing market conditions.

Zipse confidently said that the Group has a good position for the next years. Also, they have planned to align the group strategically and technologically by 2025 onwards. This includes improvements in vehicle architecture and vehicle production in every plant.

BMW Group continues to invest in future innovations and technologies. As announced, they plan to invest around € 30 billion in their R&D by 2025. The R&D expenses of the company remained very high. Costs for electrified models and modular kits for EVs significantly contributed to this.

Nicolas Peter, Member of the Board Management of BMW AG, Finance, said they would continue investing in the future of the Group. Their financial management strategy focuses on high profits and applies stricter cost management. For example, this year, they have benefited from investing in their upper luxury segment. By focusing on their 8 Series models and BMW X7, the Group increased its profits by 70% in 2018 alone. The Group sees investments as more than costs, mainly when it targets profitability.

BMW Group will continue adding more EVs to its profile. German plants will manufacture all-electric cars in the future, like the BMW iNEXT and BMW i4. Also, the Group will improve its electric drivetrain components. Starting in 2022, Dingolfing plants will produce electric motors for up to 500,000 EV units annually. Leipzig and Regensburg plants will manufacture high-voltage batteries for the EVs.

As part of the Group’s strategic focus, it will continue to aim for sustainability. BMW Group has set clear long-term objectives of reducing its CO2 emissions. By 2030, the Group’s emissions per vehicle have to decrease by at least one third than 2019 levels. To achieve this, the Group plans to release seven million EVs on the roads, with two-thirds of these being all-electric models.

The BMW Group already plans to release all-electric models by 2021. The BMW i3, MINI Cooper SE, BMW iX3, the BMW iNEXT, and BMW 7 Series, to name a few. The ‘Power of Choice” will also produce new BMW X1 and BMW 5 Series in an all-electric, plug-in hybrid, diesel, and petrol. The Group affirms that they will continue working with the reduction of CO2 emissions of its current models as well.

From July to September, the Group’s business performance improved from the impact of the pandemic. During the third quarter, a total of 675,592 BMW, MINI, and Rolls-Royce rolled out the streets. And that is an 8.6% improvement from last year. Group revenues reached € 26,283 million this year, only a 1.4% drop from last year. The Group net profit performed well with a 17.4% increase from the previous year at € 1,815 million.

The first nine months of the year saw 1,638,167 automobiles delivered to consumers. Automotive segment revenues reached € 21,962 million in the third quarter. Nine-month revenues of the same segment totaled to € 54,829. These numbers show the impact of the pandemic.

On the motorcycles segment, BMW Motorrad increased its delivery by 20.9% in the third quarter. It generated € 637 million revenues, a 14.2% increase from last year. BMW delivered 129,599 units, with payments totaling € 1,716 million.

The Financial Services segment increased by 1.7% than last year, with 5,578,149 contracts by September. 538,351 new contracts were signed in the third quarter—all these generated segment revenues of € 7,799 million. In total, 1,342,803 new contracts were signed during the first nine months of 2020.

Looking forward to ending 2020 on a good note, BMW Group assumes a good twelve-month period. But they still prepare to face the risks of today’s challenging environment. In 2020, Automotive segment deliveries will likely decrease so as with the Motorcycles segment. With the negative economic outlook, Financial Services will also generate lower revenues. Overall, Group profit before tax seems to be lower than in 2019.