BMW Group to accelerate its electrification plan to launch 25 models by 2023

BMW and Daimler AG establish five joint ventures for mobility services

2019/10/18

Summary

BMW X6 BMW Vision M NEXT
BMW X6 to be launched in November 2019
(IAA 2019)
BMW Vision M NEXT concept represents a plug-in hybrid sports car
(IAA 2019)


 The BMW Group aims to be the number one in mobility technology in the premium segment while intensifying its work on the ACES (Autonomous, Connected, Electrified, and Service/Shared) challenges.

 Regarding its electrification plan, the Group announced that it would launch over 25 new electrified vehicles globally with more than half comprising electric vehicles (EVs) and the rest plug-in hybrid vehicles (PHVs) by 2023, two years earlier than originally planned. In 2020, the MINI brand’s first battery EV and the BMW iX3, the brand’s first all-electric SUV, will be released. The BMW i4 EV coupe and the iNEXT that will feature Level 3 autonomous driving function are expected to go on the market in 2021.

 As for the autonomous driving field, the BMW Group will partner with Daimler AG to develop next-generation driver assistance technologies including autonomous driving on highways and autonomous parking. In China, BMW will cooperate with Tencent to develop autonomous driving cars adapted for the Chinese market. Besides, BMW is building a driving simulation center in Munich which is indispensable in the development of autonomous driving technology. The center will be completed in 2020.

 With respect to mobility services, the BMW Group and Daimler AG agreed on a merger of their business units in March 2018. Following the approval by the responsible competition authorities in December of the same year, the two companies established five joint ventures for providing various mobility services including multimodal transport, charging, ride-hailing, parking and car-sharing.

 During the first half of 2019, unit sales of the X family SUVs and i Series electrified vehicles increased. The all-new Z4, 8 Series and X7 made good starts. BMW plans to launch the all-new 1 Series, 3 Series Touring and X6 as well as the 8 Series Gran Coupe, a new variant of the 8 Series, by the end of 2019.

 In China, the BMW Group’s largest market, it raised its stake in BMW Brilliance Automotive (BBA), a joint venture with Brilliance China Automobile, to 75%. BBA plans to double the production capacity at its Tiexi plant in Shenyang City by building a new plant on the site. The joint venture will also remodel the facility at its Dadong plant to prepare for the production of the fully electric BMW iX3 SUV from 2020.

 The BMW Group reaffirmed its 2019 business outlook when it reported its business results for the second quarter. In 2019, the Group’s profit before tax is expected to fall significantly from the previous year as growing uncertainty such as Brexit and the U.S.-China trade frictions may have an economic impact while R & D expenses will remain at a high level for electrification and other future technologies, and manufacturing costs will increase due to stricter regulatory requirements. Global unit sales are projected to increase slightly, but the automotive segment’s EBIT margin is expected to lie within the range of between 4.5 and 6.5% compared to the original guidance of 6-8% due to the provision recognized in connection with ongoing antitrust proceedings in Europe.

 

Related Reports:
German OEM Electrification Strategies, Including EV Product Timelines (Oct. 2019)
Frankfurt Motor Show 2019: European OEMs (Sept. 2019)
Auto Shanghai 2019:Displays of the German Big 3 Automakers (May 2019)
BMW Group: launching premium-segment and electric models (Sept. 2018)



Launching 25 electrified vehicles including over 13 EVs by 2023

 BMW Vision iNEXT
BMW Vision iNEXT, a next-generation EV concept (IAA 2019)
(the series-produced version iNEXT will be launched in 2021)

 The BMW Group announced that it would accelerate its electrification plan in June 2019. The Group will launch over 25 new electrified vehicles globally including more than 13 battery EVs by 2023, two years earlier than originally planned.

 Deliveries of electrified vehicles amounted to 142,600 units in 2018 and are expected to be 143,000 units in 2019. 500,000 units of the BMW Group’s electrified vehicles will be on the road by the end of 2019, and the total for deliveries is predicted to be a million units by 2021. The BMW Group is aiming to increase the volume of electrified vehicles delivered on average by 30% per year until 2025.

 In 2020, the Group plans to introduce the MINI Cooper SE, the brand’s first battery EV, and the BMW iX3, the brand’s first all-electric SUV. The BMW i4 electric coupe based on the iVision Dynamics concept and the BMW iNEXT, a next-generation EV, will be launched in 2021.

 

BMW Group’s electrification plan (the models in blue have already been launched): 25 new electrified vehicles to be introduced by 2023

  2013~2017 2018 2019 2020 2021 2022~2023
EV BMW i3 (60Ah/22kWh),
BMW i3 (94Ah/33kWh),
BMW i3s (94Ah/33kWh)
BMW i3, BMW i3s (120Ah /42kWh)   MINI Cooper SE,
BMW iX3
BMW Vision i4,
BMW iNext
Eight more models to be introduced by 2023
PHV BMW i8 Coupe,
BMW 530Le (China) (not in series production any more),
BMW X5 xDrive40e,
BMW 225xe,
BMW 330e,
BMW 740e, Le, Le xDrive
BMW X1 xDrive25Le (China),
BMW 530e,
MINI Cooper S E Countryman ALL4
BMW i8 Roadster, BMW i8 Coupe, 
BMW 530Le (China)
BMW 745e, Le, Le xDrive,
BMW 330e,
BMW 225xe, BMW 530e,
BMW X3 xDrive30e,
BMW X5 xDrive45e,
BMW X1 xDrive 25Le (China)
BMW X1 xDrive25e,
BMW 330e Touring
Seven more models to be introduced by 2023

Source: BMW Group Investor Presentation (September 2019)

 

Electrified models BMW released/plans to release

EV MINI Cooper SE The MINI brand’s first battery EV based on the MINI 3-door Hatch will be built at its Oxford plant in the UK from November 2019 and released in March 2020. The model debuted at the IAA in September 2019. It comes with a 32.6 kWh battery and 135 kW electric motor, featuring a FWD system that provides a go-cart feeling characterized by the MINI brand. It offers a range of 235 to 270 km.
iX3 The BMW brand’s first all-electric SUV will be introduced in 2020. The model is powered by a fifth-generation electric drive unit. It will be built at the Dadong plant of BMW Brilliance Automotive (BBA) joint venture in China (the production will be transferred to the Tiexi plant in 2022) and will also be exported to other countries. The concept car which was unveiled at 2018 Beijing Motor Show is equipped with a 200 kW electric motor and a 70 kWh battery, enabling a range of over 400 km. It can be charged up to 80% in 30 minutes.
i4 The EV coupe based on the BMW iVision Dynamics concept, which had been exhibited at the IAA 2017, will be released in 2021. The model unites electric technology and BMW’s inherent values (dynamism and elegance). It comes with a fifth-generation electric drive unit and new battery pack. BMW will produce the i4 at its plant in Munich, Germany.
iNEXT Series production of this next-generation EV is scheduled to start in 2021. The prototype unveiled in August 2019 comes with a fifth-generation electric drive unit and 110 kWh battery. The model will provide a range of 550 to 750 km and accelerate from 0 to 100 km/h in three seconds. It is equipped with the latest connectivity feature, Level 3 autonomous driving function on highways, and voice assistance system. BMW will build the model at its plant in Dingolfing, Germany.
PHV X1 xDrive 25Le The updated PHV version of the X1 with the long wheelbase designed exclusively for China was unveiled in March 2019. The updated version provides an electric range of 110 km, up by 83% from the previous version. Its fuel efficiency is also increased by 72%. A 1.5L three-cylinder turbocharged gasoline engine drives the front wheels while an electric motor drives the rear wheels. Together they generate a maximum system output of 170 kW and a maximum system torque of 382 Nm. The model is fitted with a six-speed Steptronic automatic transmission. The X1 xDrive25Le will be built at BBA’s plant in Tiexi, Shenyang.
330e The new PHV version of the 3 Series was launched in August 2019. The new version comes with a 2.0L four-cylinder TwinPower turbocharged gasoline engine, electric motor and 8-speed Steptronic automatic transmission integrated with a motor. Together they generate a maximum system output of 185 kW and a maximum system torque of 420 Nm. Output of the engine will be increased by 30 kW by XtraBoost. The new version provides an electric range of 60 km in NEDC mode, up by 50% from the previous version. The 330e Touring, the BMW brand’s first PHV version of the Touring model, will be introduced in the summer of 2020.
X1 xDrive 25e This PHV version of the X1 was unveiled in September 2019. A 9.7 kWh lithium-ion battery and 1.5L three-cylinder gasoline engine with BMW TwinPower Turbo Technology drive the front wheels via a six-speed Steptronic automatic transmission while an electric motor drives the rear wheels. The model offers a maximum system output of 162 kW and a maximum system torque of 385 Nm. It provides an electric range of 57 km.
Vision M NEXT
(concept car)
This PHV sports car concept, which represents the future of the BMW brand, was exhibited at the IAA 2019. The model comes with an inline four-cylinder gasoline engine and electric motor. Together they generate a maximum system output of 600 hp, which enables the model to accelerate from 0 to 100 km/h in three seconds. It offers a top speed of 300 km/h and an electric range of 100 km.
FCV i Hydrogen NEXT
(concept car)
This FCV is scheduled to go on the market in 2025 at the earliest. In 2022, BMW plans to launch a small number of FCVs based on the X5 midsize SUV equipped with a fuel cell electric drive system. The BMW i Hydrogen NEXT unveiled at the IAA 2019 is a concept car for this FCV.

 

Activities to advance electrification

Producing batteries at Dingolfing plant In October 2018, the BMW Group announced that it would renovate and extend its Dingolfing plant in Germany with an investment of EUR 50 million to produce batteries for the all-electric MINI vehicles. Covering an area of 6,000 square meters in the component plant, equipment for manufacturing battery modules will be set up along with a battery assembly line. From 2020, the plant will also manufacture fifth-generation electric drive systems for the BMW Group’s future electrified vehicles including the BMW iX3, i4 and iNEXT.
Fifth-generation electric drive system The BMW Group’s Vice President Stefan Juraschek who is responsible for development of electric powertrains stated in December 2018 that the Group is already developing its fifth-generation electric drive systems that will go into service as soon as 2020 in the BMW iX3. A crucial advantage of this fifth-generation system is that the electric motor, transmission and power electronics form a single, highly integrated electric drive component. This compact unit takes up far less space than three separate components used in preceding generations.
Collaboration with JLR for next-generation electric drive system The BMW Group and Jaguar Land Rover (JLR) confirmed in June 2019 that they will collaborate to develop next-generation electric drive systems. The two companies aim to take advantage of economies of scale from joint research, development, engineering and purchasing. A joint team of BMW and JLR experts is located in Munich with production of the electric drive systems to be undertaken by each partner in their own plants. The BMW Group will use its fifth-generation system as a basis to develop a new-generation system with JLR.
Co-developing FCVs with Toyota The BMW Group and Toyota joined forces in 2013 to co-develop a drive system using hydrogen fuel cell technology. Since the summer of 2015, the BMW Group’s research wing has been testing a small fleet of prototype BMW 5 Series GT hydrogen fuel cell vehicles powered by a jointly developed drive system with a Toyota fuel cell stack. In 2016, the two companies signed a product development partnership agreement. In January 2017, the BMW Group and Toyota teamed up with thirteen leading energy, transport and manufacturing companies to launch a global initiative known as the Hydrogen Council. As of June 2019, the Council has grown to 60 member companies.


Autonomous driving technology: co-development with Daimler AG, partnership with Tencent in China

 In the field of autonomous driving technology, the BMW Group agreed with Daimler AG to jointly develop next-generation technologies to achieve a synergy effect and shorten the development cycle. In China, the Group partnered with Tencent, the Chinese IT giant, to develop autonomous driving solutions designed for the local market. In Munich, Germany, the Group is building a driving simulation center that will be used for development of autonomous driving technology. The simulation center is scheduled to be completed in 2020.

 

Activities to develop autonomous driving technology

Joint development of next-generation technology with Daimler In February 2019, the BMW Group and Daimler AG signed a Memorandum of Understanding to jointly develop autonomous driving technology. Initially, the focus will be on advancing the development of next-generation technologies for driver assistance systems such as autonomous driving on highways and autonomous parking (up to SAE Level 4). In addition, the two companies plan to extend their collaboration to cover higher levels of automation, both on highways and in urban areas.
Partnership with Tencent in autonomous driving field BMW announced in July 2019 that it will deepen the partnership with Tencent in the field of autonomous driving. Tencent will support research and development, technology innovation, and high-performance platform for autonomous driving in China, and will assist development of autonomous driving solutions that fit better with the specific driving conditions in the country. By the end of 2019, the two companies will open a computing center in Tianjin. This center will leverage Tencent’s cloud computing and big data, and provide BMW with the infrastructure needed to develop autonomous driving vehicles.
Building a driving simulation center The BMW Group is constructing an advanced facility in Munich with an investment of EUR 100 million for the simulation of real-world driving situations. The Driving Simulation Center, which will be completed in 2020, enables virtual testing of advanced driving assistance systems, innovative display and control concepts. This will strengthen the development expertise of the BMW Group in the field of autonomous driving.
Demonstrating Level 4 autonomous driving technology In June 2019, the BMW Group unveiled its latest autonomous driving technology at the #NEXTGen presentation event in Germany. The Group demonstrated the 7 Series with Level 4 autonomous driving function in an urban on-demand mobility scenario. An empty 7 Series, summoned by a smartphone app, drives up to collect the driver. The vehicle can be directed to any preferred pick-up point, with access authentication via smartphone upon arrival. To ensure safe driving in urban settings, the BMW Group is investing heavily in development of environment recognition technology with machine learning capabilities.


Mobility services: BMW and Daimler AG merge businesses, set up five joint ventures

 Regarding mobility services, the BMW Group and Daimler AG agreed to merge their business units and established five joint ventures for car-sharing, ride-hailing, parking, charging and multimodal transport. In China, BMW was the first foreign company to be awarded a ride-hailing license. The five joint ventures had 268.6 million interactions with 75 million customers during the first half of 2019.

 

Activities to expand mobility services

Setting up joint ventures with Daimler In March 2018, the BMW Group and Daimler AG signed an agreement to merge their mobility service business units. Following the approval by the responsible competition authorities in December 2018, the two companies set up the joint ventures in February 2019. They are investing more than EUR 1 billion in total to develop and more closely intermesh their mobility services. The five joint ventures include REACH NOW for multimodal services, CHARGE NOW for charging, FREE NOW for taxi ride-hailing, PARK NOW for parking, and SHARE NOW for car-sharing.
Starting ride-hailing services in China The BMW Group announced in December 2018 the launch of its ride-hailing service in Chengdu, Sichuan, as a part of its REACH NOW premium mobility brand business. The Group is the first non-Chinese company to be awarded a ride-hailing license in China. The ride-hailing service will complement the BMW Group’s existing REACH NOW car-sharing operation, and runs with a fleet of 200 BMW 5 Series vehicles with drivers, half of which are PHVs. Since December 2017, the BMW Group has been providing car-sharing service using a fleet of 100 BMW i3 EVs in Chengdu, run in partnership with the local mobility company EVCARD.

 

BMW and Daimler’s joint ventures with a significant end customer base and coverage worldwide

SHARE NOW FREE NOW REACH NOW PARK NOW CHARGE NOW Total
(H1 2019)
Customers
(in millions)**
>4 30.4 7.5 33.4* 0.02 >75
Interactions
(in millions)**
18.2 122.0 16.4 111.9* 0.12 268.6
Cities** 31 130 22 >1,200* n.a. >1,200
GMV RR***(in billions of Euro) 3.4

Source: BMW Investor Presentation Q2 2019

(Note) *For the U.S. entity of PARK NOW, the June 2019 figures are estimated.
**Partially, customer data is aggregated and thus, data summation is w/o the consideration of possible redundancies.
***Monthly gross merchandise value run rate is based on the previous month’s figure.

 



New model launch plans: expanding premium segment lineup

BMW 8 Series4ドアクーペ
The BMW 8 Series lineup will include a four-door coupe variant (IAA 2019)

 The BMW Group aims to increase its sales and profitability through launching strong models in the premium segment and improving its product mix. The Group forecasts that global annual sales of the premium segment are expected to grow at a CAGR (Compound Annual Growth Rate) of 1.8% to 11.8 million units in 2031 (Sales in 2019 are expected to be 9.48 million units). In China, premium segment sales are projected to increase at a CAGR of 3.4% to 4.28 million units in 2031, while in BRIKT (Brazil, Russia, India, Korea and Turkey), sales are expected to grow at CAGR of 3.9% to 760,000 units in 2031.

 According to the BMW brand’s new model launch plans in 2019, the BMW Group has released or will release the new X7 full-size SUV, the Z4 two-seat roadster developed jointly with Toyota, the new 1 Series adopting its first FWD configuration, the new 3 Series Touring with expanded cargo space, and the 8 Series Gran Coupe which is the first four-door coupe variant for the 8 Series range. In the spring of 2020, the 2 Series Gran Coupe, a new variant for the 2 Series, will be introduced.

 

BMW brand: new model launch plans

New X7 A three-row full-size SUV launched in March 2019. This SUV is powered by a 3.0L six-cylinder gasoline, 4.4L V8 gasoline or 3.0L six-cylinder diesel engine combined with an eight-speed Steptronic automatic transmission. It features the Intelligent Personal Assistant which can be controlled by voice command to operate the vehicle’s functions and services. The model is produced at BMW’s Spartanburg plant in the U.S.
New Z4 A two-seat roadster released in the spring of 2019. BMW and Toyota jointly developed the model, and Toyota launched it as the Supra in Japan in May 2019. Powered by an inline six-cylinder engine, the Z4 accelerates from 0 to 100 km/h in 4.6 seconds. The Z4 is produced alongside the Toyota Supra at Magna Steyr’s plant in Graz, Austria. The contract manufacturer plans to build 20,000 units of these models per year.
New 1 Series The third-generation model launched in September 2019. The model adopted a FWD platform for the first time as the 1 Series. It will offer significantly more cabin space thanks to the FWD architecture with a transversely mounted engine and a lower center tunnel.
New 3 Series Touring The sixth-generation model released in September 2019. Its cargo space amounts to 500 liters with the rear seats occupied, which is five liters more than the previous model. With the rear seats folded down, total cargo space increases to 1,510 liters, which is 10 liters more than the previous model. The lineup of engines include three gasoline and three diesel engines. The model is equipped with the Intelligent Personal Assistant which enables the driver to access the vehicle’s functions and services by natural voice command.
8 Series Gran Coupe A four-door coupe variant added to the 8 Series two-door coupe and convertible in September 2019. The model has a wheelbase 201 mm longer than the 8 Series Coupe. It comes with a 4.4L V8 TwinTurbo gasoline, 3.0L six-cylinder TwinTurbo gasoline, or 3.0L diesel engine, mated to an eight-speed Steptronic Sport automatic transmission.
New X6 The third-generation model of the Sports Activity Coupe to be introduced in November 2019. The model was unveiled at the IAA 2019. Its wheelbase is 42 mm longer than the previous model. The cockpit adopted a 12.3-inch customizable control display and a 12.3-inch full digital meter panel. It also uses the Intelligent Personal Assistant that can be controlled by natural voice command to operate the vehicle’s functions and services.
2 Series Gran Coupe A new five-door Gran Coupe variant of the premium compact segment to be launched in the spring of 2020. Based on BMW’s latest FWD platform, the model shares a number of technologies with the new 1 Series released in September 2019. It will make its debut at the Los Angeles Auto Show in November 2019.


China: raising stake in BMW Brilliance Automotive, increasing production capacity

 In China, the BMW Group’s largest market, the Group is enhancing its business by raising its stake in BMW Brilliance Automotive (BBA), a joint venture between BMW and Brilliance Auto, from 50% to 75%. BBA intends to increase its annual production capacity to 650,000 units (BMW Press Release dated January 16, 2019) and expand its battery factory affixed to the vehicle assembly plant in preparation for increasing sales in China, growing demand of electrified vehicles, and expanding local production due to the US-China trading frictions. BBA also plans to start local production of the X2 by the end of 2019.

 In 2018, retail sales of the BMW and MINI brand vehicles in China totaled 640,000 units, 72% of which had been manufactured locally. Over the 2014 to 2018 period, the BMW Group’s sales increased by 40% while the share of locally built vehicles grew gradually from 61% and reached 75% for the January-August period of 2019.

 

BMW Brilliance Automotive (BBA): BMW to raise its stake to 75%, expanding production capacity

Raising stake in BBA The BMW Group announced on October 11, 2018, that it would raise its stake in BBA, a joint venture in China between BMW and Brilliance Auto, from 50% to 75%. The Group will acquire a stake of 25% from Brilliance Auto for EUR 3.6 billion. Recently, the Government of China has approved a majority ownership in the joint venture by a foreign company, and the BMW Group will be the first foreign automaker to have a majority stake. By raising its stake, the BMW Group will take control of and take in more profit from its joint venture. On the same day, the Group extended its joint venture contract with Brilliance Auto to 2040.
Increasing production capacity at plants in Shenyang BBA plans to invest more than EUR 3 billion in its plants in Shenyang over the next few years. At the site of its Tiexi plant, BBA will build a new plant, which will be its third vehicle assembly plant in China, and double the site’s production capacity. At its Dadong plant, BBA will invest CNY 1,759 million for extensive remodeling and expansion to set up an annual production capacity of 40,000 units for the iX3 all-electric SUVs. In addition, BBA will spend CNY 699.2 million in its battery plant to enhance a production capacity of battery packs for the 3 Series, raising its annual production capacity to 348,000 sets. Thanks to these measures, BBA’s annual production capacity is expected to increase to 650,000 units from the early 2020s.
Starting production of X2 BBA intends to start production of the X2 in China by the end of 2019. The X2 will be the third BMW SUV built in China following the X1 and X3.

 

BMW and MINI retail sales in China

(1,000 units)

  2014 2015 2016 2017 2018 Jan.-Aug.
2018
Jan.-Aug.
2019
Imports 180.1 181.7 200.0 210.3 180.4 114.8 116.1
Locally built vehicles 275.9 282.0 316.2 384.1 459.6 285.3 346.9
Total 456.0 463.7 516.4 594.4 640.0 400.0 462.9
Share of locally built vehicles(%) 61% 61% 61% 65% 72% 71% 75%

Source: BMW Group Investor Presentation Q2 2019

 



Shifting part of production of X3 from US to China, building new plants in Mexico and Hungary

The U.S.: transferring production of X3 for China, adding production of X7 in 2019

Shifting X3 production to South Africa and China In 2018, the BMW Group exported 234,589 units of the X series crossover SUVs from its Spartanburg plant in South Carolina, the US with an export value of more than USD 8.4 billion. One third of exports were destined for China, the Group’s largest export destination. While the US-China trade frictions have been expanding, the Group ceased production of the X3 for China in 2018 and transferred the production to its Rosslyn plant in South Africa and Shenyang plant in China.
Adding  models for local production in 2019 In 2018, the BMW Group produced 356,749 units at its Spartanburg plant. The Group’s production and exports fell slightly from the previous year due to model updates of the X4 and X5. An increase is expected in its production and exports for 2019 as additional models such as the X7, X3M, X4M, and PHV versions of the X3 and X5 are produced at the plant.

 

Mexico: opening a new plant with capacity of 175,000 in San Luis Potosi

In April 2019, the BMW Group started production at its plant in San Luis Potosi, Mexico, that it had been constructing with an investment of over USD 1 billion. The plant, which employs 2,500 people, is producing the 3 Series compact sedan for North and South America. Initially the Group planned to set up the annual production capacity of 150,000 units, but announced it would increase the capacity to 175,000 in December 2018 when the plant was still under construction.

 

Hungary: building a new plant with an annual production capacity of 150,000 units

In October 2018, Hungarian Investment Promotion Agency (HIPA) announced that the Government of Hungary and the BMW Group signed the land purchasing and incentives contracts in connection with BMW’s new plant to be constructed in Debrecen. In September 2019, the BMW Group and the City of Debrecen signed the land transaction contract. The construction is anticipated to start by the end of 2019. The automaker plans to invest EUR 1 billion to build a plant with an annual production capacity of 150,000 units. More than 1,000 new workplaces will be created.

 

Thailand: setting up a battery factory for PHVs with Draexlmaier

In November 2018, the BMW Group and Draexlmaier announced it would join forces in building a battery assembly factory in Thailand with an investment of THB 400 million. Draexlmaier started production of batteries for BMW’s PHVs at the new factory completed in Chonburi in July 2019. The factory is the only high-voltage battery production site for module production and pack assembly in Southeast Asia. It produces 11.5 kWh and 23 kWh batteries for the BMW 530e and 740Le. Although current production serves only PHVs, the factory intends to build batteries for EVs in the future.


2019 business outlook: unit sales up slightly, profit before tax down significantly

 The BMW Group reaffirmed its business results outlook for 2019 on August 1, 2019. According to the Group’s forecast, deliveries are expected to increase slightly from the previous year, hitting a new record high. Profit before tax will decrease significantly due to increasing R&D expenses for ACES* including electrification and autonomous driving as well as growing manufacturing costs to meet stricter regulatory requirements. The automotive segment’s EBIT margin will be reduced to 4.5-6.5% from the original guidance of 6-8%. This is because of the impact of the provision of over EUR 1 billion recognized in the first quarter of 2019 in connection with ongoing antitrust proceedings. The European Committee is investigating the BMW Group for antitrust violation in development and introduction of emission-reduction technologies and may issue a significant fine.

(*Note: Commonly referred to as CASE

 

Business outlook for 2019 (released in September 2019)

2018 2019 Outlook
BMW Group Profit before tax EUR 9,815 million
(Adjusted (Note 3):
EUR 9,627 million)
Significant decrease
Automotive segment Deliveries to customers (Note 1) 2,490,664 units Slight increase
Fleet emissions (Note 2) 128 g/km Slight reduction
EBIT margin 7.2% 4.5-6.5%
ROCE (Return on Capital Employed) 49.8% Significant decrease

Source: BMW Group Quarterly Report Q2 2019
(Note) 1. Deliveries include sales by the Chinese joint venture.
2. Fleet emissions represent the emissions in the EU-28.
3. Prior year’s figures are adjusted due to a change in accounting policy in connection with the adoption of IFRS 16.

 



Unit sales grow by 0.8% to 1.25 million units in H1 2019

 The BMW Group’s global unit sales for the first half of 2019 grew by 0.8% year-over-year (y/y) to 1.25 million units. Thanks to sales of the X family and various i models, a total of 1.08 million units of the BMW brand vehicles were delivered to customers, an increase of 1.6% y/y. Sales volume of the MINI brand vehicles declined by 3.9% y/y to 170,000 units. The Rolls-Royce brand recorded a significant y/y increase, with deliveries up by 42.3% to 2,500 units. The brand’s first SUV Cullinan made a significant contribution to this performance.

 Regarding sales volume by region, the BMW Group’s unit sales in Asia increased while deliveries in all other regions declined. Unit sales grew by 7.0% y/y in Asia including China, the Group’s largest market, which enjoyed an increase of 16.8% in sales volume. Deliveries declined by 2.1% y/y in Europe of which Germany saw an increase of 7.7% while the U.K., which has been shaken by Brexit, experienced a drop of 3.0%. Unit sales fell by 1.7% y/y in the Americas region including the U.S., which saw a decrease of 1.0%.

BMWグループの販売台数 BMWグループ地域別販売台数

 

BMW Group unit sales

(Units)

  2013 2014 2015 2016 2017 2018 Jan.-Jun.
2018
Jan.-Jun.
2019
BMW 1,655,138 1,811,719 1,905,234 2,003,359 2,088,283 2,125,026 1,059,296 1,075,959
MINI 305,030 302,183 338,466 360,233 371,881 361,531 181,430 174,344
Rolls-Royce 3,630 4,063 3,785 4,011 3,362 4,107 1,781 2,534
Automotive total 1,963,798 2,117,965 2,247,485 2,367,603 2,463,526 2,490,664 1,242,507 1,252,837
Motorcycle 115,215 123,495 136,963 145,032 164,153 165,566 86,975 93,188

Source: BMW Annual Report 2018, BMW Quarterly Report Q2 2019

 

BMW Group unit sales by model

(Units)

  2013 2014 2015 2016 2017 2018 Jan.-Jun.
2018
Jan.-Jun.
2019
1 Series 213,611 190,033 182,158 176,032 201,968 199,980 98,396 91,509
2 Series   41,038 157,144 196,183 181,113 152,215 81,710 59,634
3 Series 500,332 480,214 444,338 411,844 409,005 366,475 192,400 178,228
4 Series 14,763 119,580 152,390 133,272 131,688 109,887 58,594 41,265
5 Series 366,992 373,053 347,096 331,410 347,313 382,753 191,185 169,527
6 Series 27,687 23,988 20,962 13,400 11,052 26,606 13,146 12,188
7 Series 56,001 48,519 36,364 61,514 64,311 56,037 27,530 23,502
8 Series           923   5,040
X1 161,353 156,471 120,011 220,378 286,743 286,827 152,866 135,103
X2           67,576 22,326 48,730
X3 157,303 150,915 137,810 157,017 146,395 201,637 78,464 149,618
X4   21,688 55,050 58,055 52,167 45,950 21,128 29,742
X5 107,231 147,381 168,143 166,219 180,905 155,575 85,307 76,347
X6 36,688 30,244 46,305 43,323 40,531 35,040 19,309 14,039
X7               13,555
Z4 12,866 10,802 7,950 5,432 1,416     7,267
BMW i 311 17,793 29,513 29,280 33,676 37,545 16,935 20,665
BMW total 1,655,138 1,811,719 1,905,234 2,003,359 2,088,283 2,125,026 1,059,296 1,075,959
MINI 305,030 302,183 338,466 360,233 371,881 361,531 181,430 174,344
Rolls-Royce 3,630 4,063 3,785 4,011 3,362 4,107 1,781 2,534
Total 1,963,798 2,117,965 2,247,485 2,367,603 2,463,526 2,490,664 1,242,507 1,252,837

Source: BMW Annual Reports 2018, BMW Quarterly Report Q2 2019
(Note) The M Series performance models including the M5 and M6 are included in their respective base model.

 

BMW Group unit sales by region

(1,000 units)

  2013 2014 2015 2016 2017 2018 Jan.-Jun.
2018
Jan.-Jun.
2019
Europe 859.5 914.6 1,000.4 1,092.2 1,101.8 1,098.5 562.1 550.4
Of which: Germany 259.2 272.3 286.1 298.9 295.8 310.4 149.7 161.3
Asia 578.7 658.4 685.8 747.3 848.8 876.6 423.9 453.4
Of which: China 391.7 456.7 464.1 516.8 595.0 640.8 300.2 350.6
Americas 463.8 482.3 495.9 460.4 451.1 457.7 226.1 222.3
Of which: USA 376.6 397.0 405.7 366.5 353.8 356.0 176.6 174.8
Other regions 61.8 62.7 65.4 67.7 61.8 57.9 30.5 26.8
Total 1,963.8 2,118.0 2,247.5 2,367.6 2,463.5 2,490.7 1,242.5 1,252.8

Source: BMW Annual Report 2018, BMW Quarterly Report Q2 2019

 



EBIT decreases by 48.8% in H1 2019 due to provision recognized in connection with antitrust proceedings

 The BMW Group’s revenues in the first half of 2019 increased by 1.1% y/y to EUR 48.18 billion, which is the previous year’s level if adjusted for currency effects. In contrast, profits decreased significantly: EBIT declined by 48.8% y/y to EUR 2.79 billion; profit before tax fell by 53.1% y/y to EUR 2.82 billion; and net profit dropped by 52.5% y/y to EUR 2.07 billion. This is mainly because the provision of over EUR 1 billion was recognized during the first quarter of 2019 in connection with ongoing antitrust proceedings. The European Committee is investigating the BMW Group for antitrust violation and may issue a significant fine. Other factors for declining profits include severe market conditions, intense competition, higher production costs and increasing depreciation expenses.

BMWグループ売上高 BMWグループEBIT/税引前利益/純利益

 

BMW Group business results

(in millions of Euro)

2014 2015 2016 2017 2018 Jan.-Jun.
2018
Jan.-Jun.
2019
Revenues 80,401 92,175 94,163 98,282 97,480 47,658 48,177
EBIT 9,118 9,593 9,386 9,899 9,121 5,446 2,790
Profit before tax 8,707 9,224 9,665 10,675 9,815 6,005 2,815
Net profit 5,817 6,396 6,910 8,675 7,207 4,358 2,068
Capital expenditure 4,601 3,826 3,731 4,688 5,029 - -
Depreciation 4,170 4,659 4,806 4,822 5,113 2,504 2,905
R&D expenditure 4,566 5,169 5,164 6,108 6,890 2,756 2,830
Number of employees 116,324 122,244 124,729 129,932 134,682 131,636 134,914

Source: BMW Annual Report 2018, BMW Quarterly Report Q2 2019
(Note) 1. EBIT stands for Earnings Before Interest and Taxes.
2. Capital expenditure: additions to property, plant and equipment and other intangible assets (definition has been changed in 2016).
3. R&D expenditure: R&D expenses plus capitalized R&D minus amortization of capitalized development cost.
4. Prior year’s figures are adjusted due to a change in accounting policy in connection with the adoption of IFRS 16 from January 2019.

 



Production Forecast by LMC Automotive: BMW's light vehicle production to be 2.65 million units in 2022

(LMC Automotive, August 2019)

BMWのライトビークル生産予測

 According to LMC Automotive's latest forecast (August 2019), BMW’s global light vehicle production is expected to be 2.65 million units in 2019, up by 3.3% year-over-year (y/y). While production in the US and China will grow by 13.7% and 6.0%, respectively, output in Germany will be unchanged from the previous year. LMC Automotive forecasts that BMW’s global production will remain almost flat over the next three years and will be 2.65 million units in 2022.

 BMW’s German plants currently have a capacity utilization rate of 88% and will require reorganization to absorb the increasing output. For now, using contract assembler Magna (in Austria) and VDL (in the Netherlands) continues to provide capacity relief. Despite plans to increase capacity at Leipzig from 250k to 300k by 2020, German capacity will remain tight. As such, the group’s new plant in Mexico is perhaps a more optimal long-term solution, although it will lower European export demand. In addition to the 3 Series, Mexico will be the global source for the all-new 4 Series GT. BMW will also begin construction of a new car plant in Debrecen, Hungary, in H2 2019. BMW is likely to consolidate model production in key facilities and reduce the need for top-up supply from contract assemblers. Thus, VDL is likely to cease build of BMW models in 2022. In the medium term, BMW’s German output is likely to be hindered further by constrained capacity and subsequent dual sourcing and localization.

 According to LMC Automotive’s forecast, BMW’s German output will be 1.09 million units in 2019. Production in the country is anticipated to decline over the next two years and will be 1.03 million units in 2022, down by 5.2% compared to 2019.

 BMW’s production in China is expected to increase by 6.0% y/y to 520,629 units in 2019, following the localization of the X3 in the country. LMC Automotive forecasts that output in China will continue to grow after 2019 and will reach 609,718 units in 2022, up by 17.1% compared with 2019.

 

BMW's light vehicle production forecast (LMC Automotive, August 2019)

(Units)

COUNTRY GLOBAL MAKE 2016 2017 2018 2019 2020 2021 2022
BMW Group BMW 2,034,278 2,159,479 2,195,241 2,291,042 2,315,616 2,284,110 2,339,113
MINI 353,752 373,764 370,138 358,160 334,637 317,258 309,809
Rolls-Royce 4,068 3,264 4,356 5,140 4,526 4,633 5,598
Zinoro 57 126 45 49 43 45 48
BMW Group total 2,392,155 2,536,633 2,569,780 2,654,391 2,654,822 2,606,046 2,654,568
Germany BMW 1,190,935 1,195,557 1,084,929 1,088,823 1,052,854 998,015 1,032,213
China BMW 305,504 396,146 491,082 520,580 554,363 577,020 598,731
MINI 0 0 0 0 2,210 8,569 10,939
Zinoro 57 126 45 49 43 45 48
China sub-total 305,561 396,272 491,127 520,629 556,616 585,634 609,718
USA BMW 411,171 371,284 356,915 405,761 406,933 355,064 337,347
UK MINI 210,971 218,885 234,183 209,478 181,191 167,953 168,571
Rolls-Royce 4,068 3,264 4,356 5,140 4,526 4,633 5,598
UK sub-total 215,039 222,149 238,539 214,618 185,717 172,586 174,169
Netherlands MINI 87,609 154,669 134,184 146,518 149,958 139,607 129,182
BMW 0 14,468 79,780 44,570 38,443 37,102 31,561
Netherlands sub-total 87,609 169,137 213,964 191,088 188,401 176,709 160,743
Mexico BMW 0 0 0 31,638 59,790 114,707 136,171
South Africa BMW 63,473 53,608 33,391 54,465 55,332 55,598 56,324
Austria BMW 8 58,504 79,383 68,322 59,905 56,344 53,534
MINI 54,096 0 0 0 0 0 0
Austria sub-total 54,104 58,504 79,383 68,322 59,905 56,344 53,534
Russia BMW 18,876 17,798 20,821 24,604 27,253 26,698 30,711
Thailand BMW 15,843 19,981 15,303 21,326 23,848 25,509 25,491
MINI 486 114 0 0 0 0 0
Thailand sub-total 16,329 20,095 15,303 21,326 23,848 25,509 25,491
Malaysia BMW 7,889 9,466 12,929 10,223 13,809 14,896 14,539
MINI 264 96 1,266 1,385 561 506 467
Malaysia sub-total 8,153 9,562 14,195 11,608 14,370 15,402 15,006
Brazil BMW 12,195 12,749 8,544 10,188 11,783 11,828 11,029
MINI 326 0 0 0 0 0 0
Brazil sub-total 12,521 12,749 8,544 10,188 11,783 11,828 11,029
India BMW 6,282 7,616 9,037 8,578 8,793 9,104 9,154
MINI 0 0 335 493 468 447 471
India sub-total 6,282 7,616 9,372 9,071 9,261 9,551 9,625
Indonesia BMW 2,102 2,302 3,127 1,964 2,510 2,225 2,308
MINI 0 0 170 286 249 176 179
Indonesia sub-total 2,102 2,302 3,297 2,250 2,759 2,401 2,487

Source: LMC Automotive "Global Automotive Production Forecast (August 2019)"
(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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Keywords
BMW, MINI, Electric, Autonomous, Mobility, USA, China, forecast, EV, PHV, FCV

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