Home News Companies Events Guestbook Golf Contact

Automotive Intelligence - the web for automotive professionals and car enthusiasts




May 16, 2007

This Week:





© 1998 - 2007 Copyright &

Automotive Intelligence,
All Rights Reserved .
For questions please contact

BMW Group will expand US Plant in Spartanburg

Annual capacity to be increased to over 200,000 vehicles

The BMW Group sees further growth potential in the USA and will therefore expand its activities in its largest single market. "We will expand the production capacity of our US plant in Spartanburg in the medium term from the current 140,000 to well over 200,000 vehicles per annum", stated Norbert Reithofer, the Chairman of the Board of Management of BMW AG at the Annual General Meeting held on Tuesday in Munich.


"This is one element of our future strategy. Taking this step will help to lower our US dollar currency risk", he added. The adverse impact for the BMW Group from the weak US dollar and Japanese yen in the last financial year alone totalled euro 666 million. The group currently manufactures the Z4 and X5 in the USA. The X6, as well as a possible successor to the X3, are to be built there in the future.

Earnings and sales volume outlook for 2007 reaffirmed

The BMW Group remains on course in terms of the targets it has set for the current financial year: "Adjusted for the gain on the Rolls-Royce exchangeable bond, we wish to improve on the record pre-tax profit result achieved in 2006", Reithofer reaffirmed. All three brands are also forecast to achieve new sales volume records. The BMW Group aims to increase sales volume for 2007 in the high single-digit percentage range to over 1.4 million vehicles. The aim remains to achieve an annual sales volume of approximately 1.6 million vehicles by 2010.

Performance in the first quarter 2007 was influenced by adverse currency factors, high raw material prices and high start-up costs for new models. The change in reported earnings was also affected by a significant "base effect" of euro 375 million, namely the one-off non-cash gain arising on the partial settlement of the exchangeable bond on shares in the British aero engine manufacturer, Rolls-Royce plc. that was recognised in the first quarter 2006.

Group revenues increased by 2.9% to euro 11,951 million (first quarter 2006: euro 11,618 million). The pre-tax profit fell by 34.3% to euro 852 million (first quarter 2006: euro 1,296 million). Excluding exceptional items, group earnings fell by only 11.7%. The first-quarter profit after tax, at euro 587 million, was 38.1% lower than the previous year's figure of euro 948 million. Despite model changes during the first three months of the year, the number of BMW, MINI and Rolls-Royce brand cars sold edged up by 0.1% to 333,276 units (first quarter 2006: 332,923 unit). The sales volume is expected to rise noticeably in the coming months thanks to new models.

BMW Group achieved record earnings in 2006

Despite the difficult conditions facing the worldwide automobile industry, the BMW Group can look back on a successful financial year 2006, achieving new high levels for sales volume, revenues and earnings. The number of vehicles sold increased by 3.5% to 1,373,970 units (2005: 1,327,992 units). All three brands headed the market in their own segments. Thanks to sales volume growth, a more favourable model sales mix and efficiency improvements, the BMW Group was again able to a large extent to offset the impact of adverse exchange rates and high raw material prices amounting to more than euro 1 billion.

The profit before tax rose by 25.5% to euro 4,124 million (2005: euro 3,287 million). This includes the one-time gain on the exchangeable bond referred to above. At an operating level (i.e. excluding the exceptional gain), the pre-tax profit improved by 3.0%. The net profit climbed by 28.4% to reach a new all-time high level of euro 2,874 million (2005: euro 2,239 million). Earnings per share rose to euro 4.38 (2005: euro 3.33) per share of common stock and to euro 4.40 (2005: euro 3.35) per share of preferred stock. Group revenues improved by 5.0% to euro 48,999 million (2005: euro 46,656 million) on the back of a strong sales volume performance and continued strong growth in financial services business.

Car sales volumes above previous year's level in virtually all markets

The USA continued to be the market with the largest sales volume for the BMW Group, with a total of 313,921 cars sold in 2006, up by 2.1% on a year-on-year basis. A total of 816,829 cars was sold in Europe, 1.7% more than in the previous year. Germany remained by far the most important European market. However, due partly to the restricted availability of the MINI, the sales volume on this market was down by 2.8% to 287,715 vehicles. The BMW Group recorded its largest growth rates in Asia. The sales volume there rose by 13.0% to 142,084 units. Japan is the largest single market for the BMW Group in this region, with the number of cars handed over to customers up by 5.6% to 62,115 units.

Sharp increase in dividend proposed

In the light of the high level of profitability and the positive outlook, the Board of Management and the Supervisory Board are proposing a significant dividend increase at the Annual General Meeting. BMW AG's unappropriated profit available for distribution, totalling euro 458 million, will be used to pay a dividend of euro 0.70 for each share of common stock (2005: euro 0.64) - an increase of 9.4% over the previous year - and euro 0.72 for each share of preferred stock (2005: euro 0.66) - an increase of 9.1% over the previous year. Including the share buy-back, BMW AG's shareholders will therefore participate in the success of the BMW Group by receiving an aggregate amount in excess of euro 700 million.

All Photos: BMW

(May 15, 2007)

   News   Companies   Management   Publications   Events   Guestbook   Search