BMW Group: Accelerating electric mobility and automated driving ventures
Partnering with Intel and Mobileye to develop fully autonomous vehicles
BMW 740Le xDrive （PHV version of the 7 series, Beijing Motor Show 2016）
New BMW X1 (Frankfurt Auto Show (IAA) 2015）
Revealing new strategy for 2016-2020
In March 2016 the BMW Group revealed its new Strategy NUMBER ONE > NEXT for the period 2016-2020. The automaker intends to expand the scope of digital connectivity between people, vehicles, and services, while at the same time advancing technological development for electric vehicles (EVs) and autonomous driving.
Electrification and automated driving
Regarding electrification, the BMW Group will have seven EVs and plug-in hybrid vehicles (PHV) on the market from 2016 onward. As for automated driving, the Group intends to deploy the autonomous driving technologies adopted for the new 7 Series to other models in the coming years. The automaker has also partnered with Intel and Mobileye to develop fully autonomous vehicles.
BMW X7 full-size SUV to be launched
The BMW Group will release the X7, which will be the top grade model in the X series, in 2018. The automaker will also expand the product range under its M brand and add performance versions for higher volume models. The Mini brand will focus on its core five models in the future.
Increasing production capacity in China, Mexico, and the U.S.
The BMW Group started operations at its new engine plant in Shenyang, China in January 2016. In Mexico, the Group is building a new assembly plant in San Luis Potosi that is scheduled to begin production in 2019. The automaker has increased annual production capacity by 30% to 450,000 units at its Spartanburg plant in the U.S. to meet higher demand for X models.
Unit sales and profit before tax expected to increase slightly in 2016
The BMW Group’s global unit sales set a new record in 2015 for the sixth consecutive year. Its revenue, earnings before interest and tax (EBIT), profit before tax, and net income also marked record highs. In 2016 unit sales are expected to increase slightly, with models like the BMW 7 Series, X1, and Mini Clubman providing the driving force. Its profit before tax is anticipated to grow slightly. However, the U.K.’s vote to leave the EU in June 2016, as well as an economic downturn and political instability in some regions may affect the automaker’s business results in the future.
New Strategy NUMBER ONE > NEXT
In March 2016 the BMW Group revealed its new Strategy NUMBER ONE > NEXT mid-term business plan for the period 2016-2020. In its plan, the automaker sees the change in mobility due to digitalization as an opportunity to attract new customers. It intends to broaden the range of digital connectivity between people, vehicles, and services while advancing technologies for electric mobility and autonomous driving.
Major strategies in the Strategy NUMBER ONE > NEXT
|Electric mobility||・A total of seven electric models (EV or PHV) will be released from 2016 onward.
・Development of hydrogen fuel-cell technology will continue.
|Autonomous driving||・Autonomous driving technologies adopted for the new 7 Series will be deployed in other models.
・Autonomous driving systems that handle levels 3 to 5 will be developed.
Level 3: Highly autonomous driving. The drivers can take their eyes off the road.
Level 4: Fully autonomous driving. The drivers can focus their attention on something other than driving.
Level 5: Autonomous driving without a human driver in the vehicle.
|Electric mobility + autonomous driving||・iNEXT (an autonomous vehicle that adopts next-generation electrification technology) is to be launched in 2021.|
|Digitalization||・BMW Connected provides a broad array of personalized information for each user.
・New digital services such as DriveNow, ParkNow, and ChargeNow will be enhanced.
|Expansion of model range||・The X7 flagship SUV will be launched in 2018.
・Expansion of the high-performance vehicle range: broadening the BMW M product range (such as the M2 Coupe) and adding M Performance versions to higher volume segments (including the M235i Coupe)
・The Mini brand will streamline its range to five core models from the current eight models. (Its five core models are reported to include the Mini (including 3-door and 5-door variants), Mini Clubman, Mini Countryman, and an open-top Mini, with another model anticipated.)
・A Rolls-Royce luxury SUV (codename: Cullinan) will be launched.
2020 financial targets: Sustainable growth and solid profitability in the midst of challenges
|BMW Group||EBIT margin||10%||＞10%|
|Capital expenditure ratio||4.2%||＜5.0%|
|Research and development ratio||5.6%||5.0-5.5%|
|Automotive segment||EBIT margin||9.2%||8-10%|
|Free cash flow||EUR 5.4 billion||＞EUR 3 billion|
Seven EV and PHV models to launched from 2016
The BMW Group has a wide range of electrified vehicles, including the i3 compact EV and i8 PHV sports car under the BMW i electric sub-brand, as well as the PHV versions of mainstream nameplates. The automaker will launch seven EV and PHV models from 2016 onward in anticipation of tightened emission regulations in Europe in 2020. It is also partnering with Nissan to deploy charging stations in the U.S., South Africa, and Mexico to promote increased adoption of electric vehicles.
The BMW Group and Toyota are jointly developing a fuel-cell vehicle (FCV) platform. The two companies aim to build fuel-cell systems in 2020.
Electrified vehicles launch plan (2016-2021)
|Facelifted i3||July 2016||The facelifted i3 got a lithium-ion battery upgrade: its cell capacity was increased by 50% from 60 Ah to 94 Ah. As a result, its driving range was extended from 190 km to 300 km (in the standard NEDC cycle).|
|i8 Roadster||2018||This is an open-top version of the i8 PHV sports car under the “i” electric sub-brand. While the i8 PHV's powertrain will likely be the same as the i8, it is expected to get an updated battery pack with increased capacity.|
|FCV||2020||An FCV. A demonstration car was unveiled in July 2015. The current test cars achieve a range up to 700 km. The BMW Group agreed to partner with Toyota to develop fuel-cell technologies in 2013 with an aim to build a basic system in 2020.|
|iNEXT||2021||The iNEXT heralds the next era of mobility, and introduces autonomous driving, digital connectivity, intelligent lightweight construction, trailblazing interior design, and next-generation electrification technology.|
|(Note) A PHV Mini is scheduled to be launched.|
BMW branding PHV versions as iPerformance models
In February 2016 the BMW Group announced that it would brand PHV versions of its mainstream vehicles as iPerformance models. This was done to highlight the link to electric technology developed for its i sub-brand. The automaker provides PHV versions for a broad range of models from a compact car to large luxury vehicles including, the 2 Series Active Tourer, 3 Series, 7 Series, and X5. (In the Chinese market, the 5 Series long-wheelbase model and X1 are also available as PHVs.)
BMW and Nissan partner to deploy charging stations
|In February 2015 the BMW Group and Nissan announced plans to jointly deploy charging stations in the U.S. The two companies will install a total of 120 dual-port 50 kW fast-charging stations across 19 states. These 50 kW stations can charge EVs up to 80% battery capacity in 20-30 minutes. Each of these locations offers a dual station with both SAE Combo and CHAdeMO connectors for owners of the BMW i3 and Nissan LEAF.|
|BMW and Nissan also revealed plans to jointly install charging stations in South Africa and Mexico in May 2015 and January 2016, respectively.|
iNEXT autonomous driving vehicle to be launched in 2021
In the field of automated driving, the BMW Group intends to deploy the autonomous driving technologies adopted by the new 7 Series released in October 2015 in other models. The automaker will also develop an iNEXT autonomous vehicle that integrates connectivity, lightweight construction, and next-generation electric mobility. Moreover, BMW, Intel and Mobileye have partnered to develop a fully autonomous driving vehicle based on the iNEXT by 2021.
New 7 Series’ autonomous driving technologies to be deployed in other models
|Active cruise control & steering and lane control assistant||The new 7 Series automatically stays in its lane and maintains a safe distance from the vehicle ahead, even when driving up to 210 km/h thanks to a stereo camera and five radar sensors.|
|Remote control parking||When parking in a tight space, the driver exits the vehicle after stopping it in front of the space. The system is then activated with the BMW display key and it maneuvers the vehicle into the parking space. This is useful for narrow areas where it is difficult to enter or exit a vehicle.|
Partnership in the field of autonomous driving, acquisition of digital mapping business
|Partnership with Intel and Mobileye||The BMW Group, the semiconductor giant Intel, and Mobileye, which possesses the image processing and sensor technology necessary for autonomous systems, announced plans to cooperate in the field of autonomous vehicles in July 2016. The three companies will team up to develop solutions for level 3, 4 and 5 (highly, fully and driverless) automated driving by 2021, and incorporate the results into the iNEXT, which BMW is developing.|
|The three partners are aiming to create an industry standard, and will build an open platform (from components to a data center) for autonomous driving technologies. This platform will be made available to other OEMs, as well as companies in other industries. The autonomous driving technologies adopted for the iNEXT will be used not only on highways, but also for automated ride-sharing services in urban environments.|
|The companies will demonstrate an autonomous test drive with a highly automated driving prototype in the near future. In 2017, test drives will be done with fleets of even more sophisticated autonomous vehicles.|
|Acquisition of HERE with Audi and Daimler||The BMW Group, Audi and Daimler successfully concluded the acquisition of Nokia’s digital mapping and location business HERE in December 2015. The three partners each hold an equal stake. They plan to develop driver assistance and autonomous driving systems, using HERE’s mapping technology. The companies jointly paid EUR 2.55 billion to acquire it. 80% of car navigation systems sold in North America and Europe use HERE’s digital mapping software.|
Launching X7 full-size SUV
As a part of its new model launch plants, the BMW Group will release the X7 full-size SUV in 2018 to address the growing demand for SUVs in the U.S. and around the world. The automaker also plans to launch a new luxury SUV under the Rolls-Royce brand (Codename: Cullinan). Moreover, it intends to broaden the BMW M product range and add performance versions to mainstream models. At the same time, the Mini brand plans to streamline its range to five core models.
BMW Brand: new model launch plans (2015-2021)
|New X1||October 2015||The new X1 has grown 53 mm taller than its predecessor, which offers more space for the interior. It has raised the seating position by 36 mm in the front and 64 mm in the rear to enhance the driver’s view of the road. The new SUV comes with an all-new selection of engines: two petrol and three diesel engines. Its fuel consumption was reduced by 17% in comparison with older models.|
|New 7 Series||October 2015||BMW’s new flagship sedan is almost the same size as its predecessor but is up to 130 kg lighter owing to the use of carbon-fiber reinforced plastic. It features a remote control parking system that can be activated by the driver from outside the vehicle.|
|X7||2018||An X series full-size SUV. A regular seven-seat version and an extra-luxurious four-seat version will be offered. It will be produced at the Spartanburg Plant in the U.S.|
Rolls-Royce Brand: new model launch plans (2016-)
|Dawn||Q1 2016||A new premium four-seat convertible. Its 6.6-liter V12 twin-turbo engine has an output of 563 hp and 575 lb-ft of torque. The new convertible can accelerate from 0 to 100 km/h in 4.9 seconds, and has a top speed of 250 km/h. It will be produced at the Goodwood plant in the U.K.|
|To be determined||A new luxury SUV. It will use a new aluminum space-frame architecture that will underpin all future Rolls-Royce model lines.|
MINI Brand: new model launch plans (2015-2016)
|New Mini Clubman||October 2015||A Mini station wagon. Whereas the previous model had gatefold doors on the rear and right-side, the new Clubman retains the dual rear doors on back only, and adopts four conventional front-hinged doors on both sides. Its height, width, and wheelbase were increased by 290 mm, 115 mm and 125 mm respectively over the previous model, which makes this the largest current Mini.|
|New Mini Convertible||March 2016||A Mini open-top model. Its soft top can be electrically opened or closed in 18 seconds while driving at speeds of up to 30 km/h. The new Convertible is longer by 98 mm and wider by 44 mm than the previous model. It is produced by VDL Nedcar, a Dutch manufacturer that does consignment production, at its Born plant.|
|New Mini Countryman||End of 2016||A Mini crossover SUV. It will adopt the new modular platform used for the new MINI Clubman. The new SUV will have a longer wheelbase and overall length compared with the previous model.|
China: share of locally produced vehicles exceeds 60% of total sales
China is the largest single market for the BMW Group. While growth momentum in the country has been weakening due to an economic slowdown, the automaker has been producing more models and increasing production volume there in the belief that China still has great potential. As a result, the share of locally produced vehicles has grown from 32% of BMW’s total sales in 2010 to 61% in 2015. The company started operations at its first engine plant in China in January 2016.
Engine plant and light metal foundry start operations in Shenyang, China
|BMW Brilliance Automotive, a joint venture between the BMW Group and Brilliance China Automotive, has completed construction of a new engine plant with a light metal foundry in Shenyang, China, and started operations in January 2016. The engine plant is producing the latest generation of the BMW TwinPower Turbo three- and four-cylinder gasoline engines for locally produced vehicles. It has an annual production capacity of 300,000 units. The foundry has a capacity of up to 15,000 tons of aluminum per year. As a part of the engine plant, a high-voltage battery production facility for future PHV models is under construction.|
Increasing production in North America, Europe, Thailand, and South Africa
North America: New assembly plant in Mexico, expansion of SUV plant in the U.S.
|Mexico||The BMW Group held a ground-breaking ceremony for a new plant in San Luis Potosi, Mexico, in June 2016. A total of USD 1 billion was invested. This project will create around 1,500 new jobs. The plant has an annual production capacity of up to 150,000 units, and the start of production is scheduled for 2019. The automaker will transfer 3 Series production from its plant in Rosslyn, South Africa to the San Luis Potosi plant.|
|USA||The BMW Group will invest USD 1 billion in the expansion of its Spartanburg Plant in the U.S. by the end of 2016 to raise annual production capacity from 350,000 to 450,000 units. The Spartanburg plant specializes in BMW X models, and this expansion is being carried out to deal with strong global demand for X models. After the expansion, the plant will be the largest in the BMW Group production network. The new X7 is also scheduled to be produced in Spartanburg.|
Europe: expansion of plants in Germany and the U.K., increasing consignment production in the Netherlands
|Germany||The BMW Group plans to invest EUR 700 million in its Munich plant through 2018 to enhance production in Germany. Its FIZ research and innovation center will also be expanded.|
|UK||The automaker increased the production capacity of its Hams Hall engine plant near Birmingham in the U.K. in October 2015 to prepare for production of next-generation engines. This is a part of a plan to invest GBP 750 million in the BMW Group’s U.K. plants. The Hams Hall engine plant has already started production of new three- and four-cylinder engines, and over one million components for the Mini Clubman and BMW 7 Series.|
|The Netherlands||VDL Nedcar, a consignment manufacturer in The Netherlands, started production of the Mini Convertible at its Born plant in November 2015. This is the second model the company produces for the BMW Group. VDL Nedcar has been producing the Mini 3-door since July 2014. Unlike the Mini 3-door, which is produced in both Oxford and Born, the Mini Convertible is manufactured exclusively in Born.|
BMW Group Thailand to export 10,000 cars per year to China
|In September 2015 the BMW Group invested THB 1.1 billion to expand its Rayong plant in Thailand. Construction finished at the beginning of 2016, with the plant doubling its annual production capacity to 20,000 units. The Rayong plant has been shipping BMW cars to Malaysia since 2006, and plans to export 10,000 cars to China in 2016. Among the eight BMW models being produced at the Rayong plant, the X3 and X5 are likely to be exported to China.|
South Africa: body shop expansion at the Rosslyn plant
|The BMW Group started expanding the body shop at its Rosslyn plant in South Africa in May 2016 to prepare for production of the next-generation X3 compact SUV. The total investment amounted to ZAR 6 billion. Construction is scheduled to be completed in the first half of 2017. The area of the new body shop will increase by 50% to 26,000 square meters. The current production of the 3 Series will be transferred to a plant in Mexico, but mixed line production will be carried out until the end of its lifecycle. Production at the Rosslyn plant reached 71,353 units in 2015 (of which 65,744 units were exported).|
2016 global sales to increase slightly with strong demand for 7 Series and X1
The BMW Group’s global unit sales increased by 6.1% y/y to 2.25 million units in 2015, which set a new record high for the sixth consecutive year. Its sales for the first half of 2016 rose 5.8% y/y with a total of 1.16 million units sold, recording best ever first half sales. The BMW brand’s deliveries of vehicles including the 2 Series, 7 Series, X1 and X3 increased by 5.8%, and the Mini brand achieved sales growth of 5.4%. At the same time the Rolls-Royce brand’s sales decreased by 4.8% from the previous year.
For the whole year, unit sales are projected to be at an all time high in 2016, with the 7 Series and X1 expected to see slight increases due to factors like the effect from the release of new models.
Unit sales in 2015 increased in all regions from the previous year: Sales in Europe increased by 9.4% y/y to 1 million units; sales in Asia grew by 4.2% to 686,000 units; and sales in the Americas rose by 2.8% to 496,000 units. For the period of January-May 2016, sales in Europe remained strong with a 10.3% increase compared with the same period of the previous year. Sales in Asia grew by 6.2%, and the region’s biggest market, China, achieved a 6.3% increase with strong sales of the X Series and refreshed 3 Series. At the same time, sales in the Americas decreased by 7.9%. In the U.S., sales were down 9.8%. At the same time there continues to be a strong demand for the compact SUVs, and sales of the X3 and X1 are growing.
BMW Group’s unit sales
|Source: BMW Annual Report 2015, BMW Press Release on July 12, 2016|
BMW Group’s unit sales by model
|Source: BMW Annual Reports 2015, BMW Investor Presentation (June 2016)|
|(Note) High-performance M models such as the M5 and M6 are included in its base models.|
BMW Group’s unit sales by region
|of which Germany||267.2||285.3||287.4||259.2||272.3||286.1||116.3||125.3|
|of which China||169.6||233.6||327.3||391.7||456.7||464.1||190.4||202.3|
|of which USA||266.6||306.3||348.5||376.6||397.0||405.7||160.5||144.8|
|Source: BMW Annual Report 2015, BMW Investor Presentation (June 2016)|
Slight increase in profit before tax; targeting an EBIT margin of 8-10% in 2016
The BMW Group’s 2015 results saw revenue increase by 14.6% y/y to EUR 92.18 billion, and EBIT, profit before tax and net profit grow by 5.2%, 5.9% and 10%, respectively.
For the first quarter of 2016, the Group’s revenue was EUR 20.85 billion, on par with the previous year. Its EBIT decreased by 2.5% y/y while profit before tax and net profit surpassed the previous year’s levels. The EBIT margin for the automotive segment reached 9.4%, which was within the target range of 8-10%.
For all of 2016, the BMW Group’s business results are expected to be positive despite a challenging business environment from factors like intensified competition and political instability. Its profit before tax is forecast to increase slightly and achieve a new record high. Automotive segment revenues are projected to grow slightly and the Group's EBIT margin is expected to reach the targeted range of 8-10%.
BMW Group’s business results
(in millions of Euro)
|Profit before tax||7,383||7,803||7,893||8,707||9,224||2,269||2,368|
|Number of employees||100,306||105,876||110,351||116,324||122,244||117,554||122,692|
|Source: BMW Annual Report 2015, BMW Quarterly Report Q1 2016|
|(Note) EBIT stands for Earnings Before Interest and Taxes.|
BMW’s global production expected to be 2.6 million units in 2019 (LMC Automotive, June 2016)
|(LMC Automotive,April 2016)|
LMC Automotive updated its forecast in June 2016 to include projected implications of the U.K. vote to leave the European Union on June 23. According to this forecast, BMW’s global production is expected to be 2.41 million units in 2016, up 4.3% y/y. After 2017, the automaker’s production will continue to increase gradually and reach 2.63 million units in 2019, a 9.1 % increase compared to 2016. In the medium term, group capacity will remain tight, but BMW will manage this through a combination of existing plant expansion (Spartanburg, USA), investment in all-new facilities (San Luis Potosi, Mexico) as well as further commissioning of contract assemblers (Magna, Austria).
LMC Automotive’s new base forecast does not assume the U.K.’s leave vote will fuel an EU economic downturn. However, heightened uncertainty about the future political and economic landscape in Europe could have a meaningful impact on business confidence and market sentiment. If this leads to a slowing of EU GDP growth, then this will naturally have a negative impact on light vehicle demand and production in the region.
BMW’s production in North America for 2016 is forecast to be relatively flat from last year at 402,000 units. This is due to the expected natural decay of the X3. The Spartanburg facility, BMW’s only assembly plant in North America, will be expanded again to prepare for the X7, a 3-row Large Premium SUV, for global consumption. The facility will have a capacity of 450,000 units and start production of the X7 in December 2018. It is also expected that a portion of the X3 Spartanburg production will shift to BMW’s Rosslyn plant in South Africa, beginning in the second half of 2018, to relieve some utilization pressure at the U.S. plant. BMW’s new plant in San Luis Potosi, Mexico, is expected to begin production in 2019, with a planned capacity of 150,000 units. This plant will build the 3 Series, 3 Series GT, and the 4 Series.
In China, BMW’s production for 2016 is expected to increase by 4.3% y/y to 301,000 units. Localization in the country will continue to expand, and BMW is forecast to build 504,000 units in 2019, a 67.8% increase compared with 2016.
BMW's light vehicle production forecast by make and country (LMC Automotive, June 2016)
|BMW by make||BMW||1,745,706||1,874,042||1,965,165||2,035,704||2,090,640||2,152,944||2,249,983|
|Source: LMC Automotive "Global Automotive Production Forecast (June 2016)"|
|(Note) 1. Data indicate figures of only small-size vehicles, including passenger cars and light commercial vehicles with a gross vehicle weight of under 6 tons.
2. All rights reserved. Reproduction of any data will require permission of LMC Automotive
For more detailed information or inquiries about forecast data, please contact LMC Automotive.
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