The BMW Group invested substantially in the mobility of the future during the first half of the year, while at the same time firmly continuing on its course of profitable growth.
Rigorous implementation of the Group’s Strategy NUMBER ONE > NEXT is playing a key role, as the company shapes the transformation of the automotive sector. Driving this process forward, the BMW Group always remains focused on the needs and desires of its customers and is continuing its ground-breaking work on the four ACES topics (Autonomous, Connected, Electrified and Services/Shared). The BMW Group has also set a decisive course for its future in China, the company’s largest growth market.
“We continue to focus on following our own path and remain firmly on course. We are consistently preparing ourselves to meet the demands of tomorrow. This approach enables us to remain a reliable partner – all the more important during challenging times,” stated Harald Krüger, Chairman of the Board of Management of BMW AG, in Munich on Thursday. “The BMW Group has more than 100 years of experience in dealing with volatility in a changing world. Our vision remains clearly on long-term prospects. It is crucial that we remain focused on the key issues of profitability, growth and innovation to ensure our competitive edge going forward.”
As planned, this year the BMW Group has significantly increased its upfront expenditure on future mobility. Research and development expenses over the first six months of 2018 were more than € 300 million higher than in the corresponding period one year earlier and totalled € 2,610 million (+13.6%). As previously reported, full-year R&D expenses are likely to reach up to seven per cent of Group revenues in the current year (2017: 6.2%).
In addition to ramping up production to drive the new model offensive, the BMW Group is focusing on expanding its activities in the fields of electric mobility and autonomous driving. In both cases, the BMW iNEXT will serve as a technological spearhead that sets new standards. It will be presented to the public as a vision vehicle during the second half of 2018 and will be built at the Dingolfing plant from 2021 onwards. This underlines the significance of Germany as a key location for future technologies and a centre of competence for electric mobility.
Commitment in China taken to a new level
Over the past few weeks, the BMW Group has also taken numerous steps to expand its footprint and the scale of its commercial success in China. The BMW Group and Brilliance Automotive Group have agreed to further expand their joint venture BMW Brilliance Automotive (BBA) and, from 2020 onwards, to export the all-electric BMW iX3 (which will be manufactured by BBA) to markets outside of China.
As previously stated, the BMW Group welcomes China’s commitment to a further opening of its markets and initiating reforms by lifting the foreign shareholding limit for automotive joint ventures for passenger vehicles as from 2022. However, it remains the BMW Group’s policy not to comment publicly on ongoing discussions with partners.
In addition to expanding the BBA joint venture, the BMW Group has signed an agreement with the Chinese manufacturer Great Wall Motor to produce electric MINI vehicles in China through a mutual 50:50 joint venture. As well as electric MINI vehicles, the “Spotlight Automotive Limited” joint venture will also produce electric vehicles for Great Wall Motor. The establishment of the new company is subject to approval by the relevant Chinese authorities and the finalisation of business registration procedures.
The BMW Group is also investing in Europe, adding a new plant in Hungary to its existing production network and thereby maintaining a good balance in terms of global manufacturing between Asia, America and Europe. “The decision to construct this new plant highlights the BMW Group’s prospects for growth,” said Krüger. “This new location will also produce vehicles powered by combustion engines and electrified drivetrains on the same production line.”
The BMW Group is developing worldwide into a mobility tech company and systematically expanding its expertise and capacities in the field of software development. To this end, during the second quarter the BMW Group signed an agreement with CRITICAL Software to form a joint venture called Critical TechWorks, subject to examination and approval by the relevant antitrust authorities. The BMW Group’s stake in Critical TechWorks secures access to the know-how and skills of a highly successful European software development company, whose locations in Lisbon and Porto are witnessing dynamic growth in this sector. Meanwhile, the BMW Group continues to increase the number of people engaged in IT and software development in Germany and at its many other facilities around the world.
BMW Group underlines its leading role in electric mobility
The BMW Group has pioneered electric mobility and followed this path resolutely ever since the market launch of the BMW i3 almost five years ago. Following the launch of the new BMW i8 Roadster, the BMW Group’s product range now includes ten electrified models. The number of electrified BMW and MINI vehicles delivered since the beginning of the year has increased to 60,660 units (+42.5%), underlining the BMW Group’s position among the world’s leading providers of premium e-mobility. “We are delivering on our promise of more than 140,000 electrified vehicles this year,” said Krüger. Furthermore, production of the battery-electric MINI will begin at the Oxford plant at the end of 2019, followed in 2020 by the all-electric BMW iX3, which will be manufactured in Shenyang, China. Together with the BMW iNEXT and the BMW i4, the BMW Group is set to have 25 electrified models on the roads by 2025, half of which will be all-electric.