Originally Posted by Tleong (Post 681895)

Sethro, I did a quick search, any truth in the talks that Audi raised on a new billboard with the R8?

Originally Posted by AzNMpower32 (Post 681918)

In regards to currencies, automakers will hedge against a currency years in advance. Therefore although the € has gained strength, essentially what the German and other EU carmakers did was lock in, or hedge the currency years in advance (usually 3-5yrs I think) so that fluctuations will not significantly erode the bottom line.

Originally Posted by Tleong (Post 681891)

I'm also having trouble finding threats and weaknesses that are inclusive to BMW only. ....Are there no threats/weaknesses unique to BMW or am I just missing something?

Originally Posted by JCL (Post 682146)

While not unique to BMW, I think that BMW is exposed because of their overdependence on the US market, which pays much less for the same vehicle than other markets do. The US is essentially a price driven market for these types of vehicles (sport/luxury/prestige).
Can you explain this further? I'm not quite sure what you're trying to say. However, according to FY2008 (2009 is released at the end of this month), U.S. accounted for 21.3% of all revenue compared to Germany (20.2%) and Europe + UK (29.7% and 9.2% respectively).

I also think BMW is exposed because of the perceived or real quality of their dealer network. The US commonly refers to BMW dealers as "stealerships". That is, and should be, insulting to those who work in dealerships. You are only as good as your distribution chain, and US BMW customers don't appear to value the contribution of BMW dealerships. BMW knows this, and it explains their focus on customer surveys in an effort to weed out the lower quality dealers.
Are there any studies/professional reports that suggest this? I understand that BMW dealerships are not fancied among their consumers, but in FY 2008, BMW Financial Services (Leases, financing, etc.) were the only profitable unit - accounting for 26.2% of total revenue. Is the "stealership" mentality a proven one on paper and/or studies? Or simply a general consensus among car-drivers. Also... on a related note, I have heard of other brands such as Infiniti and Toyota who have poor service and are referred to as "stealerships" as well. Perhaps this isn't just BMW? (Just a thought)

BMW knows that they can't compete on manufacturing competence or volume, so they are going for more niche products. Makes sense. Lots of variations of similar themes. That is why they rebuilt the US plant, to introduce more flexible manufacturing tooling to handle multiple products with less retooling costs. The trouble is that endlessly pursuing niches introduces new problems for a smaller manufacturer. Look at the amount required to certify new models, at the testing costs, at the technical and sales training costs for the distributor and dealer network. In addition, there is the risk of brand dilution.

I would focus on these types of issues over the product issues. BMW is a purchaser of parts and components, an integrator of parts and components, a designer, a product developer, a manufacturer, an assembler, a distributor, and the manager of a dealer network. Which of these can they do really well, and which are more of a challenge? Don't just think of driving a shiny new model, that represents just the tip of the iceberg that is readily visible. It is the bulk of the above list (the stuff under the water) that matters as well.

Just my $0.02

Originally Posted by AzNMpower32 (Post 681918)

The ever more stringent European emissions standards are a challenge for all carmakers, not just BMW. Basically, a lot of the difficulties that apply to BMW also apply to the automotive industry as a whole.

In regards to currencies, automakers will hedge against a currency years in advance. Therefore although the € has gained strength, essentially what the German and other EU carmakers did was lock in, or hedge the currency years in advance (usually 3-5yrs I think) so that fluctuations will not significantly erode the bottom line. That said, North America has been an unprofitable market for BMW in the last few years. That's reflected in the shift of vehicle allocations to other markets such as the Middle East and Asia, where there has been continued growth in spite of the recession. Once again, this statement also applies to other EU makers as well.

Originally Posted by Naz24 (Post 682098)

btw. i think we all deserve to read this report when its complete!

Originally Posted by sethro (Post 681898)

Yeah they did :rofl: lets see how BMW responds M6 maybe