BMW is continuing with its biggest ever new model introduction by unveiling several new products at the Frankfurt Motorshow. Despite the investment needed to develop and launch these products, together with an expansion drive into the Asian market, the company is still expected match last year’s profits.
BMW’s continuing new-product offensive will help the firm exceed last year’s sales and see it top the one million unit mark, according to chairman and chief executive Helmut Panke. Mr Panke also predicted that the firm was likely to post flat profits for the year, despite the expected sales achievement.
The German luxury car firm has made a strong showing at this year’s Frankfurt Motorshow, where it has unveiled its all-new 6-Series Coupe and X3 4×4 models, together with face lifted models and engine variants designed to maintain the sales momentum. The Coupe has made a strong impact at the show and will be a successful piece of ‘umbrella branding’, even if it does not significantly add to the sales total.
The new X3, a smaller version of the company’s X5 model, will have more of an impact on sales, particularly the diesel variant. Other models to grace the stand are a revamped X5, and two new 5-Series models, the 545i and the 525i.
Whilst the outlook for profits is not what we have come to expect from BMW, maintaining the levels achieved last year (E3.3 billion pre-tax) was an impressive achievement given the cost of this extensive product development, which also includes the Z4 and forthcoming 1-Series. No doubt the company’s MINI division is giving it a boost, with demand for all Mini variants still very high. Last year, 144,000 Minis were sold, whilst BMW-brand model sales totaled 913,000.
The company is now focusing on Asian markets to continue its advance. However, with both geographical and product expansion, BMW will need to make certain it can maintain its traditionally high margins to ensure that profits in 2004 exceed those for the two previous years.
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