Ukraine-Russia row may jeopardize BMW Group’s outlook

Article by Andrew Christian, on March 21, 2014

BMW Group’s outlook would be jeopardized if the ongoing crisis between Ukraine and Russia turns from bad to worse, according to chief financial officer Friedrich Eichiner. While Russia accounted for only 2 percent of BMW's 1.96 million vehicles in group sales in 2013, the country was among the automaker's fastest growing markets.

BMW posted a 12-percent surge in sales in Russia to 44,871 vehicles, in contrast to a 5.5-percent decline in the country's auto market, according to the Moscow-based Association of European Businesses. BMW’s figure included deliveries by the Mini brand. According to Eichiner, BMW was aware of potential risks of an escalated conflict between the two countries.

"There are risks in the Russian business. We see risks in currency. The the ruble has weakened. So long as the crisis does not escalate then we stick to our guidance. If it does, all our statements about our outlook that we made today need to be questioned," Eichiner said.

He noted that any spiraling of the dispute would compel the German carmaker to revise its plan for Russia, adding the BMW also has obligations with its business partners in the country. Eichiner said that BMW was ''closely monitoring the situation." Ian Robertson, BMW's board member for sales and marketing, said that he sees potential in the Russian market in the longer term.

In 2013, auto sales in Russia dropped 5.5 percent to 2.78 million units, delaying the country's rise as the second largest market in Europe next to Germany. [source: Reuters]

Topics: russia, bmw

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