BMW CEO Reithofer promises a year of record sales - and profits.
After a strong first quarter, The BMW Group expects to harvest record profits this year – and it is also targeting an all-time sales record, the Bavarian maker’s CEO said.
“We have ambitious plans for 2011,” said Norbert Reithofer, Chairman of the Board of Management of BMW AG, at the Annual General Meeting held in Munich.
Once content to be a relatively niche player, focusing on a narrow range of high-line products, BMW has been stretching the boundaries of luxury and intends to push even further, expanding not only traditional offerings but a mix of new “green” machines that will culminate in the debut of an all-new sub-brand focused on battery power.
The expanding line-up should bolster demand, Reithofer said, telling shareholders, “We aim to deliver more vehicles than ever before – well over 1.5 million vehicles.”
The company’s finances have clearly been on the upturn. And it continues to push for an EBIT – or Earnings Before Interest and Taxes — margin target of more than 8% for the automotive segment. It helps that buyers are willing to give BMW a significant premium for its products.
BMW's Vision Concept will soon reappear in production as the i8 battery car.
In turn, investors are also paying a premium. In 2009, the price of an ordinary share in BMW rose by 47%. In 2010, it even went up by 85%, making it the best individual performer in the German DAX. From the beginning of this year until May 10th of this year, the price of a BMW ordinary share rose by another 6.5%.
Over the last 10 years, the BMW ordinary share has gone up 62%. Excluding the dividend, that’s the equivalent of an annual return of around 5 percent.
“Over the same period, annual returns on DAX shares have amounted to 2% per annum,” Reithofer noted.
The CEO added the company’s strong product portfolio is helping bring in more premium customers around the world.
“Our product range is fresh and emotional – and it’s highly sought-after by our customers,” said Reithofer, noting that readers of the German Automobile Association’s magazine ADAC Zeitung recently voted the new 5-Series the most desirable car in the country..
While BMW has traditionally been known for its dynamic driving behavior, the maker is facing the same push to become more environmentally friendly that faces its more mainstream rivals.
Speaking to shareholders, the executive underscored the BMW Group’s push into greener technology, pointing out that its fleet currently comprises more than 50 cars with CO2 emissions of 140 grams per kilometer or less.
The maker is specifically targeting environmentally focused buyers who still want dynamic performance with a new line of battery-powered models, such as the upcoming BMW i8. The new brand-within-a-brand will also feature BMW’s first all-electric model. Based on the Megacity Vehicle concept, it will be marketed as the BMW i3.
While Reithofer said the final design remains secret, he told shareholders, “I promise you next year the BMW i3 will be standing here, right in front of this stage.”
Addressing those worried that the switch to battery propulsion will dilute the traditional BMW brand attributes, the executive insisted that, “For us, there’s one thing that is not about to change: Sheer driving pleasure,” Reithofer said “The BMW i family is going to continue that tradition.”