BMW Going on the Offensive
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Case Details:
Case Code : BSTR065
Case Length : 13 Pages
Period : 2003
Organization : BMW
Pub Date : 2003
Teaching Note :Not Available
Countries : Germany
Industry : Automobile
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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EXCERPTS Contd...
The Results
By late 2002, BMW's strategies seemed to be paying off. Most of its new launches were successful in the market, resulting in increased revenues.
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In late 2002, BMW announced that car sales had increased to 805,800 units (for the first nine months of 2002) from 671,850 units in the corresponding period the previous year. This reflected a 20% increase in sales. By September 2002, the MINI (launched in 2001) had already crossed its target of 100,000 units (104,900 units) for fiscal 2002. Over 26,800 MINIs were sold in the UK, while 17,250, 15,760 and 12,860 were sold in Germany, the US and Italy respectively. BMW also registered high growth rates worldwide on its new BMW models launched during the early 2000s. In the UK, BMW and MINI vehicles recorded a 48% increase in sales for the first nine months of 2002, as compared to the same period in 2001...
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Driving into the Future
In early 2003, BMW announced that it would be launching many new products and revised versions of its existing models that year.
Some of the new products and revised versions due for launch in 2003 were a new BMW 6 Series, New BMW X3, a diesel version of MINI, MINI One D and revised versions of the BMW 3 Series and the BMW 5 Series. During the same period, the company also got the rights to the famous car brand Rolls Royce. These rights were transferred from one of its rivals, the German automobile major Volkswagen, as per an agreement made in 1998 (between BMW, Volkswagen and Rolls Royce Plc.), when Volkswagen had acquired the automobile business of Rolls Royce. BMW announced that it would launch new Rolls Royce cars as well in mid-2003. BMW sources expected the new models to significantly increase sales volumes in 2003...
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A Few Potential Roadblocks?
According to reports, GM was reviving its Cadillac division to develop a new SUV, SRX, aimed at BMW customers. Porsche also announced plans to launch a new model that would compete with BMW's Z4. Paul Halata, President, Mercedes-Benz (US), observed, "Everyone is trying to get into the upper end." Analysts attributed the focus of automobile players on the premium segment in the early 2000s to the increase in sales in the premium segment of the automobile market, despite an overall slowdown in economy through the early 2000s. Reportedly, the premium automobile segment grew by 7% through mid-2002, even as the entire automobile industry remained flat...
Exhibits
Exhibit I: The Global Automobile Industry (Premium Segment)
Exhibit II: BMW Group Financials
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