After exceeding $100 billion in revenue, BMW is building a future with another $30 billion!

The day after the global stock market crash and meltdown (March 18), the BMW Group announced its 2019 financial performance in the form of a live online broadcast: for the first time, the Group's full-year revenue exceeded 100 billion euros, reaching 104.21 billion euros, an increase of 7.6% year-on-year.

BMW financial results were quickly sought after by the capital market as soon as they were announced. As a constituent stock, the BMW Group even drove the German DAX30 index to a big reversal.

The annual revenue of more than 100 billion euros, comparable to the domestic second-tier cities

100 billion euros is what kind of concept? Translated into yuan it is 770 billion yuan. And according to China's 2019 mainland city GDP statistics, Yantai, which ranked 25th, had an annual GDP of 765.3 billion yuan. In other words, BMW's income in one year is already comparable to second-tier cities in China.

The BMW Group, in order to strengthen investment confidence, has also paid out a total of 1.65 billion euros in dividends for this purpose?

. Based on the financial results for the year 2019, the Board of Directors and Supervisory Board of the BMW Group will propose to shareholders at the Annual General Meeting on May 14, 2020 that they pay a dividend of €2.50 per ordinary share, as well as a dividend of €2.52 per preferred share. The total amount of the dividends will be about 1.65 billion euros, or 32.8 percent of net profit.

As a manufacturing enterprise held by the fund and the family, to ensure stable dividend income for shareholders is an important prerequisite for determining the consistency of the enterprise's strategic implementation in the process of transformation and upgrading. In the view of industry experts, the more uncertainties in the market environment increase, the more emphasis on investor confidence. Winning the trust of investors has always been a top priority for us," said Dr. Peter, BMW Group Director responsible for corporate finance. We want them to make the company's success together as much as our employees."

It should be noted, however, that on the other side of the important breakthrough in operating income, the decline in profitability shows more of the challenges BMW faces in its progress. Impacts from EU policies and increased investment in R&D and production have pegged the BMW Group's profit margin at 6.8% for the 2019 fiscal year. "There is still a lot of room for this figure to rise," according to Dr. Peter.

Notably, Dr. Peter also singled out BMW Brilliance's profit contribution in the Chinese market, which grew by 180 million to 980 million euros. "The Chinese market will always be a core area for BMW."

Global deliveries of 2.538 million new cars, Chinese market contributes a lot

Car makers profit of course by selling cars!

In the face of a cold global car market, BMW Group sales continued to grow against the trend. In terms of new car deliveries, the BMW Group*** delivered 2,538,367 new cars, an increase of 2.2%. The BMW brand delivered a total of 2,185,793 vehicles, a 3.3% year-on-year increase; the MINI brand delivered a total of 347,474 units; and the Rolls-Royce brand delivered a total of 5,100 units, a 21.6% increase. Motorcycles delivered a total of 175,162 units, up 5.8 percent year-on-year.

The BMW Group's huge global sales were also helped by China.

In China, the BMW Group delivered 724,733 units (including BMW and MINI brands), up 14 percent year-on-year, the best sales record since entering the Chinese market in 1994, and the Chinese market also contributed more than a quarter of its sales. BMW Group said the company will further expand its investment in China in 2020. The key is to grasp the Chinese market and let it play a steady and sustained role in boosting sales.

As for its new energy strategy, the group sold more than 145,815 new energy vehicles last year. By the end of 2019, BMW has accumulated sales of 500,000 units of electric vehicles, and the Chinese market has accumulated sales of more than 50,000 units. It has become the highest new-energy-selling automaker among luxury brands.

For the record sales, BMW attributes it to the drive of the strongest product offensive in its history, especially the increasing share of the large luxury car segment. Data show that in 2019, BMW?X7, 8 series and other large luxury car sales rose nearly 75%. Insiders pointed out that the 8 series, X7, 7 series and other models are from the CLAR platform, under the platform production, with a higher unit selling price of large luxury cars, to help the BMW Group to obtain a higher profit per car, which will help the group revenue to reach a full year of history of the best financial income.

Facing the future, the BMW Group is taking multiple measures to bet on electrification

Despite continuous sales growth, the BMW Group is actively transforming itself into electrification and intelligence in the face of a cold global car market, the spread of epidemics, and the European Union's increasingly stringent emissions policy. The force is strong, and the determination is strong.

Zipzer said: "The European Commission has proposed to make Europe the first region to achieve carbon neutrality. For the BMW Group, we will also achieve our goal."

As we mentioned earlier, BMW has accumulated sales of 500,000 electric vehicles, including more than 50,000 in China. And it is expected that within two years, the BMW Group's sales of new energy vehicles will double again - that is, by the end of 2021, BMW plans to deliver a cumulative total of 1 million new energy vehicles to customers around the world.

To achieve this goal, BMW will also launch more plug-in hybrid models this year. First of all, in terms of pure electric models, BMW will launch a pure electric BMW iX3. It is understood that the iX3 will be equipped with BMW's latest five-generation BMW?eDrive electric drive control system, with more than 70kWh of power battery, a range of more than 400km under the WLTP standard (estimated NEDC mileage of more than 500km), and the maximum charging power of up to 150kw. new car competes with the likes of the Mercedes-Benz EQC and Audi e-tron when it goes on sale. By 2023, BMW will expand its lineup to 25 new energy models, more than half of which will be purely electric.

It can be seen that, at a time when the auto market is undergoing a major change not seen in a century, BMW is betting heavily on electrification regardless of the momentary gains and losses. This move can undoubtedly provide strong support for its future revenue and profit growth. Of course, for the transformation of electrification, BMW has obviously been fully prepared. At the conference, BMW put forward a very detailed "transformation plan".

1, invest tens of billions of euros to ensure the supply of raw materials and power batteries

According to the BMW Group's plan, one-third of its emissions reduction target will be achieved by further optimizing the traditional powertrain, while two-thirds will be achieved through the growth in sales of electric vehicles. By 2030, BMW plans to double the energy density of its electric cells, offering customers twice the pure electric range from the same volume of batteries.

To this end, in 2019, BMW has invested a cumulative total of more than 10.74 billion euros at the level of procurement of batteries and related raw materials, including: in the supply of power batteries, the BMW Group announced in November 2019 that it had deepened its cooperation with the battery supplier, Ningde Times, by making additional purchases, with the total amount of the order raised to 7.3 billion euros, up from 4.0 billion euros contracted in 2018, and the validity of the contract extended to 2031. In addition, last year, BMW Group also announced with another battery supplier Samsung SDI, signed a total of 2.9 billion euros of long-term supply contracts, valid from 2021 to 2031.

In addition, in order to guarantee the supply of raw materials for batteries, this year BMW will also make direct lithium and cobalt direct purchases for Ningde Times and Samsung SDI direct supply of raw materials.

2, increase R & D efforts, investment of more than 30 billion euros

Zipzer said: "New technology is the key to the future of travel. By 2025, we plan to invest more than 30 billion euros in research and development, and only companies that can develop and integrate both software and hardware will be able to shape the future of the automobile. In this regard, we are clearly on the fast track."

The BMW Group's total R&D expenditure over the past five years was €292.73. Of this, the highest R&D expenditure was in 2018, at €6.89 billion. And since 2015, the BMW Group's annual R&D investment has exceeded €5 billion for five consecutive years.

In addition to the large amount of money invested, it is matched by electrification R&D centers, the layout of factories around the world, as well as a sufficient talent pool.

Currently, BMW has 31 plants in 15 countries around the world, and this globalized layout has not only helped the group share risk, but in Zipzer's words, "it has allowed us to stay close to our customers, to remain flexible, to respond faster to their needs, and to realize our growth potential."

And in terms of talent development, BMW is investing €370 million in training and employee career development in 2019 alone. Currently, BMW has about 46,000 people worldwide who have received electrification-related training, amounting to one-third of the total number of employees. Moreover, BMW is still recruiting technical talents for software development, autonomous driving, electric vehicles and other fields to help the "ACES new four" transformation.

It's the costly investment in research and development that gives the BMW Group a leading edge at a time when the industry is facing dramatic changes. "In all strategic areas, we have taken decisive steps at the right time. Now, we will also continue to use our competitive advantages to lead industry trends," Zipzer said.

3, open source and save more than 12 billion euros by the end of 2022

The above mentioned investment in R&D, supply of raw materials, mass production of new models, etc., all require huge amounts of money. So the question is, where does the money come from? In order to make up for the high up-front investment in future technologies, BMW has also developed a whole set of "open source" programs for itself.

First of all, it is "cutting back"!

In order to make up for the high upfront investment in the layout of future technologies, the BMW Group has continued to implement the Performance>?NEXT program launched in 2017 to continuously improve efficiency.

Dr. Peter said, "Upfront expenditures for future technologies such as electric mobility require financial support. So we continue to firmly address internal issues with a clear focus on business performance and efficiency. By optimizing our core businesses, we are improving financial strength and business performance across the board. The business segments that have achieved growth are in line with market trends and have helped the business secure the funding it needs to continue to advance its sustainable mobility strategy."

It is understood that the program aims to save more than €12 billion by the end of 2022.

The second is "open source".

In terms of product development, BMW currently uses a modular, scalable intelligent vehicle architecture platform, which can produce both traditional combustion engine vehicles and plug-in hybrid and electric vehicles on the same production line. This will shorten the development time for new models by one-third, minimizing development costs;

And on the product side, BMW plans to transition to an enhanced Intelligent Vehicle Architecture from 2021, with 50 percent of its conventionally-powered models no longer being developed as subsequent replacements, in order to support the rollout of more electric models. These initiatives will begin to take full effect in the electrification segment after 2022.

Finally, BMW is also regularly evaluating and simplifying its model range. In the areas of indirect purchasing as well as material and production costs, the BMW Group strengthens internal synergies and continues to improve efficiency. The company has also strengthened its business performance by launching a range of new models in the most rewarding segments. For example, as the flagship of the BMW brand, BMW's next generation BMW 7 Series will offer diesel engines, gasoline engines, plug-in hybrids, and for the first time, a purely electric model that will truly give consumers the "power of choice". At that time, the pure electric BMW 7 Series models will be equipped with the fifth generation of BMW eDrive electric drive technology.

The conference was not a long one, but from BMW's clear plans for the future, we can see that despite the challenges of the current auto market, BMW has demonstrated the confidence and strength of a century-old automaker. By continuously increasing its investment in future mobility, as well as its accumulation in R&D, production, talent reserve, strategy and other aspects, BMW has become more flexible and efficient and unleashed more kinetic energy when risks come. As BMW Chairman Zipzer said, "BMW has historically performed well in the face of crisis."

This article comes from the authors of the Motor Home Car Family, and does not represent the viewpoint position of the Motor Home.