BMW: Braking Bad

[pinto + 293]

BMW was tipped to overtake its rivals because of a skilful navigation of new EU emission tests. Instead, the German carmaker is caught in the general snarl-up. Its shares fell 4 per cent on Wednesday after worse than expected third-quarter results. The shares’ 12 per cent fall over three months has outstripped the Euro Stoxx autos index. A 10-year view would look very different; annual returns averaged 18 per cent. Bimmers, as BMWs are known, are meticulously engineered. The enjoyment of driving an “ultimate driving machine” has made BMW one of the top luxury car brands. But its fortunes could be at a turning point. Threats from environmental regulations, technological change and new competitors are huge. BMW was ahead of rivals in meeting the EU’s more stringent rules but others rushed to register cars ahead of the September deadline. The resulting glut of vehicles prompted a price war. Higher raw material prices, currency effects, a steeper recall provision and tariffs between China and the US have also hurt. The company’s operating profit margins in its core automotive division more than halved to 4.4 per cent, from 8.6 per cent a year earlier. In September the company warned that its eight-year streak of delivering an 8-10 per cent profit margin‎ had ended. But will — as it suggests — lower margins be limited to quarters where it faces a lot of problems outside its control? Some investors are not so sure. According to Bloomberg, the shares are valued at just 7 times next year’s earnings, down from a peak of nearly 13 in 2015. Yet BMW has a chance to steer round the obstacles. Core free cash flow is being squeezed but was still over €2bn for the first nine months. The group is investing heavily in research and development and in China, where it has just spent €3.6bn on its joint venture. Revamped and new models, such as the X7 sport utility vehicle, should boost sales.
 

[PavelP + 15]

I'm sure 2019 will even be worse, they need to review hiked prices to regain their lost market share...

[50 shades of black + 254]

Bad year for BMW.  The world's Top 10 by revenue and market cap
1 - Toyota
2 - Volkswagen
3 - Daimler
4 - General Motors
5 - Ford Motor
6 - Honda Motors
7 - SAIC (China)
8 - BMW
9 - Nissan
10 - Fiat Chrysler

https://www.mbaskool.com/fun-corner/top-brand-lists/17621-top-10-car-brands-in-the-world-2018.html

 

[DA? + 301]

BMW have sat on their hands for the last ten years. I think the sales figures of luxury cars in the USA is very telling of the future.

[damirUSBiH + 327]

BMW has dialed back its investments in electric cars. This could be a big mistake.

"BMW says 85 percent of cars will still have engines in 2030"

https://www.greencarreports.com/news/1119308_bmw-says-85-percent-of-cars-will-still-have-engines-in-2030

 

[rainman + 263]

 

4 minutes ago, damirUSBiH said:

BMW has dialed back its investments in electric cars. This could be a big mistake.

"BMW says 85 percent of cars will still have engines in 2030"

https://www.greencarreports.com/news/1119308_bmw-says-85-percent-of-cars-will-still-have-engines-in-2030

 

Yep. As you can see, BMW is not really interested in the future of EV. The New York Horse Carriage company said 85% of its carriages will be horse-drawn in 1930. 

[Petar + 76]

The wind that comes from the Bavarian alps says that BMW will get a lot worse.

[Jan van Eck + 7,558]

15 hours ago, rainman said:

 

Yep. As you can see, BMW is not really interested in the future of EV. The New York Horse Carriage company said 85% of its carriages will be horse-drawn in 1930. 

And it probably would have, except the managers overlooked the continuing problem of the vast amounts of manure and urine that those horses were dumping onto the city streets daily.  It was in the millions of pounds, all which was left to rot,as the volume was too large to remove manually.  The vast quantities of manure are blamed for several large health epidemics,  and I vaguely recall that horse carriages were administratively restricted at one point.  Administrative action is the big factor when you live (as the world largely now does) in an Administrative State, where bureaucrats make decisions over your life.  

EVs will just explode in ownership when big cities outlaw or administratively restrict, or charge extra levies on, gasoline engines.