Bmw will not revise its profit and sales goals despite economic turmoil

Article by Christian Andrei, on September 7, 2011

Despite the uncertainty in the economy, BMW will not revise its profit and sales goals, Chief Financial Officer Friedrich Eichiner told Automotive News Europe. Eichiner added that they are optimistic, but they see certain risks and a growing volatility.

In addition, he stated that the high sovereign debt of some countries as well as the potential of rising inflation and higher taxes will affect consumer spending and will increase the volatility of the trend more. Eichiner has acknowledged that the stock exchanges worldwide are already manifesting this.

Moreover, he mentioned that the company is seeing a number of difficult scenarios in Greece as well as in Italy and Spain. The company forecasted its global sales of new vehicles to increase by 1.6 million for 2011 (about 10 percent), Eichiner revealed.

In addition, he said that they are aiming for an EBIT margin of at least 10 percent in the vehicle segment this year. In addition, the company wants to keep profitability in the range from 8 percent to 10 percent in the next years despite its heavy investments in new technologies, powertrains and products.

Eichiner further disclosed that the R&D share in 2011 will be within the target corridor of 5 percent to 5.5 percent, with the help of the strong increase in revenue and the efficient development procedures. He further disclosed that the share of investment will be less than 7 percent of revenue by the end of 2011 brought about by the increase in revenues.

Eichiner predicts that the cost of carbon fiber, which is a key material in BMW’s new electric vehicles, will fall sharply, stating that in the course of the product life cycle, the company intends to bring the cost of carbon to the same level as aluminum. “Naturally, volumes are the key here," he explained.

Topics: bmw, profit, sales

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