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BMW Annual Press Conference 2020: Plant closings and drop in profits

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BMW Annual Press Conference 2020
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U nusual times under the impression of the virus: BMW's annual press conference on Wednesday (March 18th, 2020) took place digitally. The BMW board of directors at a safe distance from each other on the podium, the journalists' questions are played live.

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BMW CEO Oliver Zipse at the 2020 results press conference

The chairman of the board, Oliver Zipse, made it clear right at the beginning which one The corona event also means a turning point for BMW. For BMW, the protection of employees is the top priority, and operations must also be maintained, said Zipse. As an immediate measure, BMW will close the production plants in Europe and Russia as well as the plant in South Africa for four weeks and encourage employees to work from home as far as possible. The production shutdown is planned until April 19, 2020 for the time being.

BMW production will be discontinued

BMW works council chairman Manfred Schoch said in this context that the BMW collective bargaining employees, even with short-time work, at least 93 percent of their net wages received.

Traditionally, the subsequent detailed part at the balance sheet press conference was given to CFO Dr. Nicolas Peter with the figures for the previous year and the outlook for the coming financial year. In 2019, BMW was able to achieve good results worldwide, the fourth quarter of 2019 was the strongest in the company's history. The profit before taxes rose in Q4 /2019 by +14.2 percent to 2.06 billion euros. BMW was able to expand its market share, especially in the luxury segment, which is crucial for further investments in e-mobility.

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BMW CFO Dr. Nicolas Peter at the 2020 results press conference

Despite increasing sales of 2.54 million vehicles delivered in 2019 (+ 2.2%) However, profit before taxes in 2019 as a whole increased by a significant -26.1% to 7.12 billion euros. As for the current 2020 financial year, Peter did not have high hopes: After a pre-tax return on sales of six to eight percent was expected before the outbreak of the pandemic (2019: 8.2%), the forecast of the EBIT margin is now available reduced to two to four percent. According to Peter, global vehicle sales in 2020 will be 'significantly below the previous year'. In any case, BMW will close the first half of 2020 with a minus. According to Peter, longer-term developments cannot be estimated at the moment.

Loss in the first half of 2020 inevitable

According to CFO Dr. Peter gave BMW CEO Oliver Zipse an outlook on the future BMW timetable. BMW sees far-reaching technological and social changes in the future and is reacting to this with an investment volume of 30 billion euros in research by 2025.

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BMW has now delivered 500,000 electrified vehicles

Zipse also raised the high proportion of electrified BMW models, here especially the plug-in vehicles. In 2019 alone, 146,000 fully and partially electrically powered vehicles were sold worldwide and now over 500,000 BEV and PHEV are on the market. In view of this development he is sureto keep the number of employees stable.

Continued development focus on combustion engines

Zipse also went into detail on the development of e-mobility and at the same time broke a lance for the burner. Manufacturers who rely on e-mobility unilaterally are missing out on opportunities. For many buyers, the combustion engine remains the best design, and accordingly BMW will continue to invest in the development and consumption optimization of combustion engines. 'Anyone who does not develop here will lose touch,' said Zipse - even without naming VW, it was clear to whom this statement was applied.

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In Germany, BMW is the market leader for electrified vehicles (BEV and PHEV)

Equally But the e-topic is also being pushed. Here the own added value should be increased by as much in-house production as possible. Among other things, BMW wants to take over the purchase of raw materials for the suppliers' batteries. Compared to today's models, BMW wants to double the range of the electric vehicles in the next ten years.

Zipse: 'The world car is history'

At the same time, Zipse gave the 'either-or' option 'Course from other manufacturers a rejection: As an example, he named the upcoming i4, which will roll off the assembly line with the future 4 Series Grand Coupé and will come' very close to the study 'in design. The next generation of the flagship 7 Series with four drive alternatives (diesel, gasoline, PHEV and BEV) will also appear as a purely electric model, but on an equal footing with the three other variants.

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Important volume models receive mild hybrid technology

According to Zipse, half of all new BMW deliveries should have an electrified drive by 2030. This also includes 48-volt technology with mild hybrids, which is now being gradually introduced.

Finally, Zipse highlighted the networking of models as an important future development. This enables functions to be updated 'over the air' without having to visit the workshop. As an example, he cited the software retrofitting of a high beam assistant or the expansion of the entertainment system in order to be able to integrate mobile phones under Android Auto - this is to be introduced at BMW from July.


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