Author: Potato Fish C
“Life is full of uncertainties, just like how the big intestine wraps around the small intestine.”
As someone who has already taken off their autumn pants, dry cleaned all their winter clothes, adapted to two weeks of warm temperature, and eagerly awaited the arrival of spring, I was surprised to see snow in Beijing in April.
However, isn’t unpredictability the reason and fun of life’s struggle?
Just like when you hear “BBA,” you may think of Mercedes-Benz, BMW, and Audi in that order. But NO, this year, the ranking may need to undergo some changes.
In 2021, BMW Group delivered 2.52 million cars worldwide, surpassing Mercedes-Benz’s sales of 2.33 million and becoming the global luxury car sales champion.
Good sales naturally bring in good income.
On March 16, BMW Group held its 2022 annual report conference and handed in an extremely impressive report card:
In 2021, the BMW Group achieved a total revenue of 111.239 billion euros, an increase of 12.4% year-on-year; the Group’s pre-tax profit exceeded 16 billion yuan, an increase of 207.5% year-on-year; and the Group’s net profit exceeded 12.4 billion euros, a whopping increase of 223.1% year-on-year.
Among them, the total revenue of the automotive business was 95.48 billion euros, a year-on-year increase of 18.1%; the interest and tax pre-profit margin reached 10.3%, and the automotive business profit margin returned to the two-digit range.
New Controlling Shareholder: BMW Brilliance Automotive
As a Chinese audience member, the most impressive keyword of the entire report for me, and one that BMW mentioned many times, was “BMW Brilliance Automotive.”
Nicholas Peter, CFO of BMW Group, stated that in February of this year, BMW Group completed a stake increase in BMW Brilliance Automotive.
As a result, BMW Group’s shareholding in BMW Brilliance Automotive increased from 50% to 75%, making it a controlling shareholder of BMW Brilliance Automotive. BMW Brilliance Automotive will also be fully incorporated into BMW Group’s financial statements in the 2022 fiscal year.
And “BMW Brilliance” has two positive meanings for BMW Group.
First, BMW Brilliance has become an important support point for BMW sales.
In 2021, BMW Group sold more than 846,000 vehicles in the Chinese market, an increase of 8.9% year-on-year, and China’s market share accounted for more than 30% of BMW Group’s global sales share.
Among these 846,000 vehicles, more than 652,000 vehicles were sold by BMW Brilliance. BMW Brilliance accounted for more than 77% of BMW’s sales in the Chinese market and more than 23% of BMW’s global sales.
In the 2021 luxury car market in China, BMW not only has the best sales volume among the three BBA brands, but also is the only brand among the three that maintains positive growth.
Second, BMW Brilliance has achieved a breakthrough in share ratio.
Previously, due to policy reasons, foreign car brands that wanted to enter the Chinese market for production and sale had to choose a Chinese enterprise as a joint venture partner, and the foreign party could not hold a higher stake than the Chinese party.
Earlier this year, the Chinese government adjusted this policy. BMW became the first joint venture automaker to have a higher proportion of foreign shareholding than local shareholding, and BMW also became the first luxury brand to control the joint venture in the Chinese market.
With the increase in share ratio and the rise in sales volume, it is obvious that BMW Brilliance will still play the role of “cash cow” in the future.
As Dr. Peter says, “he who gets the Chinese market gets the world.” He also predicts that financial consolidation alone will bring BMW Group a one-time positive impact of 7-8 billion euros.
New Standard: BMW iFACTORY
2021 is the year when BMW’s new energy transformation has achieved initial success, and it is also a year when BMW looks forward to a new stage of transformation towards zero-emission travel.
In order to better cope with future production of pure electric models, especially to prepare for the new vehicles based on the “Next Generation” architecture that will be produced in 2025, BMW introduced a new production network standard, BMW iFACTORY, at the 2022 financial report conference.
BMW iFACTORY represents BMW’s production strategy vision: lean, green, digital. Its mission is to provide a global solution for the transformation of the production network in the electric era, thereby redefining the future of automobile production.
Lean refers to efficiency, precision, high flexibility, and the ability to integrate different driving technologies and vehicle architectures into production.
Green refers to production using the most advanced technology, minimal resource consumption, and a circular economy model. BMW plans to reduce the carbon emissions per vehicle in the production process by 80% compared to 2019 by 2030.
Digital represents the use of data science and artificial intelligence in production to improve the collaboration capability of BMW employees worldwide in a digital way.
Dr. Norbert Reithofer, responsible for BMW’s production, said:
“This is a true transformation and our response to the metaverse.”
It is reported that the BMW iFACTORY standard will be applied in all BMW Group factories worldwide, including three vehicle factories and one powertrain factory located in the Shenyang production base.
New Flagship: BMW i7
After discussing the medium and long-term plans, let’s focus on the present.
BMW Group Chairman Zipse said that by 2022, BMW will have 15 mass-produced and trial-produced pure electric vehicle models, covering about 90% of the segmented market.
In addition to models such as BMW iX, BMW i4, and BMW iX3 that have already been launched, pure electric vehicle models of series such as BMW 3 Series, BMW 5 Series, and BMW X1 are also included.
And the most heavyweight of them, without a doubt, is the new generation flagship sedan – the all-new BMW 7 Series and its pure electric version, BMW i7, which will make its global debut at the Beijing Auto Show on April 20.
BMW i7 is regarded as the strongest rival to Mercedes-Benz EQS and will finally appear in front of the public after nearly a year later than its rival.
It is worth mentioning that although both cars are the pure electric flagship of their respective brands, Mercedes-Benz and BMW have their own understanding of what a pure electric flagship should be.
Mercedes-Benz’s definition of EQS is not a pure electric version of the S-Class, but rather the flagship of Mercedes-Benz pure electric models. In other words, EQS is not just adding EQ, which represents pure electric, in front of S, but it is a prominent model of the Mercedes-Benz EQ family.
BMW seems to be more conservative – the i7 is simply the pure electric version of the BMW 7 Series.
Because BMW’s CLAR platform is itself a fully powered platform, gasoline, diesel, plug-in hybrid, and pure electric are all easy for it.
The advantage of this choice is that we can be very certain that the product strength of the BMW i7 will not create the same sense of distance between the BMW 7 Series as the one between the Mercedes-Benz S-Class and EQS; at the same time, we can experience the higher sense of technology brought by pure electric.
As for the product strength, one month later at the Beijing Auto Show, we will see the real chapter.
Moreover, our safety director’s EQS is already eager to move, who is the current boss among pure electric flagship luxury cars? “Pure Electric Flagship Showdown” has already been recorded in our topic book, stay tuned.
This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.