Flatcapdriver

This should annoy a few people. Just think of all those BMW drivers contributing to BMW's coffers, honking round without using their indicators looking down on others in their chavmobiles.



BBC NEWS | Business | BMW sales climb to record in 2006

KiwiGTI

Actually I still maintain that those drivers have migrated to Audis over the last few years.

Skittles

Maybe people don't like them for whatever reason etc. One thing you have to admire: they are one of the last real independent motor companies. They have resisted the urge to increase profits be sharing parts between brands and brand engineering.

Wonder how long that will last though...

leonpoole

Thats the reason i would never buy an Audi (Skoda/VW/Seat) because with most models, barring the slightly better interior and looks i feel your only paying for the badge

KiwiGTI

Exactly - interesting article in the Economist I think, basically saying how good the marketing machine for Audi/VW etc is when you consider the actual cost to manufacture an A4 is virtually identical to a Mondeo. (which has a better chassis and handling)

KiwiGTI

Like Toyota?

Steve vRS

...and Hyundai

AudiLover

BMW makes more profit per vehicle than audi and VW so that article was wrong there

BMW is the 3rd most profitable mainstream car manufacturer in the world. Porsche is first, and toyota is second.

Skittles

Didn't mention this as word on the street is of a Toyota-Ford merger very soon... Why? Cost cutting synergies... Same old story - economies of scale from sharing parts.

I used to have an RS6 and (while this was obviously not why I sold it) it used to wind me up as when I got a minicab, which these days tend to be Skodas, the DIS and may other bits were a bit too familiar! In fact the parts sharing was so blatant it does lead you to believe (as someone has poined out) the VAG group are a very successful marketing machine!

Skittles

Funnily enough Clarkson in last week's Sunday Times was talking about just this issue:

"All the players reckon they can shave costs by merging with one another. So you have Daimler and Chrysler, Renault and Nissan, and Ford which has gobbled up Volvo, Aston Martin, Land Rover and Jaguar.

Apparently, however, even this isn’t enough so now there’s talk of General Motors joining forces with Renault and Nissan, and of Porsche reversing into Volkswagen, which already owns Seat, Audi, Lamborghini, Bentley and Skoda.

Eventually I can see a time when there are only three car companies in the entire world. There will be one in the Far East, one in the West and BMW. Already, I have a sense when I drive a new car that it’s really just a mildly altered collection of exactly the same components that I encountered in the new model I drove the previous week. The tyres are from Pirelli, the gearbox from ZF, the brakes from AP, the stereo from Harmon Kardon, the seats from Recaro, the windscreen wipers from Bosch and so on.

Of course, BMW is no different. The bits that make up your 3-series are from the same companies that make the bits for everything else. And yet . . .

BMW is like Switzerland. It’s in Europe and the people there have eyes, noses and hair. On the face of it, they’re just like us, but they’re not.

The Swiss are independent and focused. And BMW’s the same. It doesn’t make vans or tractors or trucks. The only other places you’ll find the blue and white roundel is on a motorbike — which is cool, if you like wearing leather trousers — and on the Gulfstream V, which is cool no matter what strides you prefer. Sure, Bee Em dallied with expansionism in the Nineties, taking on Rover and emerging with Rolls-Royce and Mini, but it is still privately owned, and now has no obvious ties to anyone else.

Theoretically this shouldn’t work. BMW should have been crippled by go-it-alone development costs and wiped out by over-production. But last year it sold more cars than ever and predicted pre-tax profits in the region of £2.6 billion.

Perhaps this is because in the one-size-fits-all modern world some of us crave something a little bit different. A Kentucky Fried Partridge. A Big Mac and new potatoes. "


Don't get me wrong: I'm not saying anything about BMWs being great/bad, just saying whatever you think of the cars, in today's world you do have to respect a company with guts to go it alone and not share a common parts bin. The most relevant part in the above article is:

"Theoretically this shouldn’t work. BMW should have been crippled by go-it-alone development costs and wiped out by over-production. But last year it sold more cars than ever and predicted pre-tax profits in the region of £2.6 billion."

Skittles

Hardly surprising is it?

Unlike BMW, VAG also sell a shed load of small and cheap cars (e.g. small Skodas/VWs/Seats) - where its more about volume not margin. So when you calculate average profit per vehicle it will be higher.

I may be wrong, but as Audi is not a separately listed company I doubt VAG show profitability across its individual brands. Where did you get that information?

AudiLover

Audi makes 1500 profit per vehicle. VW only 380. Porsche 20,000 and bmw 3,000. Cant be bothered to post the article.

KiwiGTI

So the most profitable car maker on the planet, and the biggest is going to merge with a company that has just announced its biggest loss of $12 billion? I don't think so.

Skittles

Really?

Because a company has announced a loss it does not make it unattractive for a take over. The loss can be due to one off costs (which is in fact their recent restructuring costs), non cash costs like depreciation or writing down R&D etc. If they had negative CASHFLOW of (as you say) $12bn they'd be bust a long, long time ago. As it happened their shareholders are still receiving dividends.

Did you forget their $1.5bn profit in the previous year, or that they are forecast to hit profitability again in 2009?

Oh, and the whole point of merging is to create synergies and cut costs.

PS: Porsche is the most profitable car manufacturer in the world.

KiwiGTI

In any case a merger won't happen. Strategic initiatives may where there is benefit to both companies, but then Toyota has been doing this for years. (eg: In Australia some Holdens were branded as Toyota and vice versa)

I think you'll find most people classify Toyota as the most profitable carmaker, it's not usually done on a per unit basis.

Flatcapdriver

I like them alright, owning a couple but I believe that they will retain their independence as there's simply no reason for them to merge with another company, and they are simply too large and profitable for any manufacuter to takeover apart from the fact that the Quandt family wouldn't let it happen.

Similarly, to Porsche they are making huge profits and it terms of brand stewardship (Rolls Royce and Mini) are far better at it than other manufacturers such as VAG or Ford - and for those reasons I believe their independence will continue.