Release Date: March 14, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Bayerische Motoren Werke AG (BAMXF, Financial) anticipates a rise in sales figures for 2025, with a decrease in capital expenditure, leading to increased free cash flow.
- The company maintains a robust global footprint, providing resilience and flexibility to respond to external influences.
- Bayerische Motoren Werke AG (BAMXF) achieved significant growth in battery electric vehicle (BEV) sales, with a 13% increase year-on-year, and BEVs accounted for over 17% of total sales.
- The Neue Klasse project is set to be a groundbreaking initiative, with production starting soon, marking a significant technological advancement for the company.
- The company has a strong brand portfolio, including BMW, MINI, Rolls-Royce, and BMW Motorrad, each with a distinct identity and global popularity.
Negative Points
- The company faced challenges in the Chinese market, with weak market dynamics impacting sales performance.
- Intense price competition in China led to a decline in sales volume and affected the company's financial performance.
- The automotive segment's EBIT margin was impacted by pricing headwinds, particularly in China, and dealer compensation issues.
- Tariffs and trade tensions pose a risk to the company's operations, with potential impacts on profitability.
- The company experienced delivery stops related to the integrated braking system (IBS), affecting sales performance in the second half of 2024.
Q & A Highlights
Q: Can you provide insights on the potential impact of tariffs, especially between the EU and the US, and how they might affect BMW?
A: Oliver Zipse, Chairman of the Management Board, emphasized the importance of free trade for global business models. He noted that tariffs harm everyone and expressed hope for their reduction. Walter Mertl, Member of the Board of Management, Finance, added that BMW has taken a conservative approach, creating provisions for tariffs, and is monitoring the situation closely.
Q: What is the status of the IBS brake issue, and will it impact 2025 operations?
A: Joachim Post, responsible for purchasing and supplier network, confirmed that BMW, in collaboration with suppliers, has implemented effective hardware and software measures to address the IBS brake issue. There are currently no delivery stops due to this issue, allowing normal sales and retail operations.
Q: How is BMW addressing challenges in the Chinese market, and what are the expectations for growth there?
A: Jochen Goller, responsible for customer, brands, and sales, acknowledged the challenging market environment in China, citing consumer confidence and structural issues. BMW is optimistic about stabilizing and growing its business in China through investments, dealership restructuring, and launching 10 new models, including the X3 long wheelbase.
Q: What are BMW's plans regarding the USMCA compliance and potential tariff impacts from Mexico?
A: Milan Nedeljković, head of production, stated that BMW is exploring localization opportunities in North America, including battery cells and components, to meet USMCA requirements. The company is using its flexible production network to mitigate potential tariff impacts.
Q: How does BMW plan to manage supply chain costs and potential supplier insolvencies?
A: Joachim Post explained that BMW's local-for-local production approach helps mitigate supply chain costs. The company evaluates tariff impacts individually and leverages its global supplier network for flexibility and cost optimization. There are no current plans for workforce restructuring in China.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
