Size Doesn't Matter: BMW Delivers Big Boy Profits
Didn’t they say that you have to be a monster car company with at least 5 million units, just to survive? BMW did not get the memo. Aiming for sales of just 1.5 million units this year, BMW delivered a first quarter 2011 net profit before tax of €1.812 billion ($2.691 billion), surprising analysts that had expected something in the neighborhood of $2 billion.
As a comparison, GM, the world’s second largest automaker, “may report $1.74 billion in net income for the three months ended in March,” says Bloomberg. Quarterly results of industry leader Toyota will be announced next week, and nobody dares to place any bets at the moment. Volkswagen, currently #3 in the global sales ranking, earned €2.2 billion ($3.268) in the first quarter.
Size doesn’t seem to matter, at least not in this quarter.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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Funny what a company can do when it is privately held and can focus primarily on product instead of shareholder wealth. The options are expensive but I don't recall hearing the words "BMW" and "cost cutting" or "BMW" and "decontenting" in the same sentence.
That works out to nearly $1800 per vehicle, but what fraction of average transaction price is that? It means a lot more if Hyundai is making that kind of per-car money, than it does to BMW, for example.
This is news? The base 3-series is $35k but I don't see more than $22k in content and material make up. Vinyl seats, AM/FM/CD, 205/55/16 tires, 230HP, open diff... Snobbery must be at an all time high but at least people are owning up it. In the past you could could deny it while claiming German cars had superior quality/engineering/handling.
I am 60 years old and have wanted a BMW since my first ride in a high school teachers husbands 2002..that would be around 1969.When I was a kid in Iowa I saw my first BMW. It was that 'rad' looking coupe,I am thinking a'CS' but please correct me if I'm wrong.We had a dealership in Columbus that sold them along with Alfa`s..... As I grew older I kept thinking that my income would one day allow me to buy one,nothing fancy,just a '3'series.Well with kids and a mortgage and so on and so on.....It never came to pass..until a year ago when I was able to buy a 2000 M Roadster.I drove it home from Columbus Ohio to Memphis Tennessee with the top down and the radio off!Let me tell you that in my opinion the "ultimate driving machine" is alive and well.There are a lot of people that buy BMW`s...and weather its for "the right reasons"or not ,They are still,IN MY MIND"the ultimate DRIVERS machine. oldyak