Successful strategy, strong growth and the next step to the NEUE KLASSE were the highlights of the BMW Group annual conference on March 21, 2024 in Munich.
Strong products, strong demand, strong results: Following a successful 2023, in which the Automotive Segment reported its highest-ever operating result, the BMW Group aims to continue on its profitable growth course in the current financial year. Fully-electric vehicles (BEVs) and models from the upper premium segment should remain the main growth drivers again in 2024. In both segments, the BMW Group expects to see significant double-digit growth in the current financial year. “The more challenging the framework conditions become, the more important it is to implement a consistent strategy. As a result, strong products and a high degree of responsiveness will remain our key success factors in 2024. This will continue to make us a reliable partner for customers, investors and stakeholders in the future,” said Oliver Zipse, Chairman of the Board of Management of BMW AG, at the annual conference on Thursday.
BMW Group meets all business objectives and maintains leading position in the premium segment.
In financial year 2023, the BMW Group achieved its business objectives, as forecast. Despite intense competition and volatile conditions, it successfully continued on its path of profitable growth. The company thus maintains its leading position in the global premium segment: As of December, BMW Group delivered 2,554,183 premium vehicles (2022: 2.399.632 units / +6,4%) to customers.
Increase in consolidated sales revenue and group earnings (EBIT).
Group revenues for the full year rose to € 155,498 million (2022: € 142,610 m. / +9,0% / currency adjusted: +13,1%). Revenues in 2023 fully contain those of BMW Brilliance Automotive Ltd. (BBA) while this applies for the previous year’s period only after the full consolidation from February 11, 2022. This must be taken into account when comparing the previous year. Earnings before interest and taxes (EBIT) for the full year reflect the strong operating performance of the BMW Group: In 2023, EBIT climbed to €18,482 million (2022: € 13.999 m; +32,0%).
R&D spending and capital expenditure to peak in 2024, as planned.
The company will maintain its strategic course, as planned, in 2024, with extensive investment in its plants, its range of premium vehicles and innovative technologies. In addition to capital expenditure, R&D spending will also reach a new high this year. This will mainly be focused on electrification of the vehicle portfolio, including the products of the Neue Klasse, as well as in-car digital innovations, such as connectivity, software stacks and automated driving.
“We are investing in the future of our company like never before. Our capital expenditure and R&D spending will reach new levels. We are expecting a capex ratio above 6% and an R&D ratio above 5%. Both metrics will then return to their usual strategic range. Despite these major investments in our future, we are targeting a free cash flow of over six billion euros in the Automotive Segment in 2024. This speaks to the financial strength of the BMW Group,” said Walter Mertl, member of the Board of Management responsible for Finance. “We continue to focus on cost discipline and sustainable profitability – the long-term target range of 8-10% for EBIT margin in the Automotive Segment remains our benchmark.”
Compelling products - BEV offering as main growth driver.
In 2023, the BMW Group significantly increased (+74.2%) its sales of fully-electric vehicles to over 375,000 units, clearly underlining its role as an e-mobility pioneer. The company thus delivered significantly more fully-electric vehicles to customers than its direct European competitors and also significantly more than most of the new-entry players from Asia and the US.
With the fully-electric BMW i5, which will also be released onto the market this year as the first fully-electric Touring model, and the New MINI Family, the BMW Group will have a BEV option in virtually all its main segments. There will be more than 15 fully-electric models across all BMW Group brands on the market in 2024.
BMW Vision Neue Klasse x gives an outlook on the future fully-electric SAV segment.
Just one year before production of the Neue Klasse gets underway, a new Vision Vehicle previews the BMW Group’s future fully-electric SAV segment: The BMW Vision Neue Klasse X brings the philosophy and technology of the Neue Klasse to the Sports Activity Vehicle sector. “Together with the BMW Vision Neue Klasse, the BMW Vision Neue Klasse X showcases the breadth of our future BMW model line-up. From sporty sedan, with all its derivatives, to modern SAV family: The Neue Klasse reflects the variety of models that customers want today and in the future,” said Zipse. The Neue Klasse will be launched end of 2025 at the new BMW Group Plant Debrecen (Hungary). The first vehicles are currently completing test drives under extreme conditions.
Hydrogen fuel cell as further pillar of drive technology.
The BMW Group is systematically pushing forward with development of Hydrogen fuel cell technology as an additional option for sustainable individual mobility and – depending on market requirements and how conditions develop – could envision a potential production vehicle in the second half of the decade. A pilot series of the BMW iX5 Hydrogen* was presented to media from around the world for the first time in 2023. Since then, the fleet has been deployed with great success for demonstration and testing purposes among various target groups.
Profitable growth expected for 2024.
The number of deliveries of BMW, MINI and Rolls-Royce brand vehicles in the Automotive segment is expected to be slightly above the previous year's level in 2024 due to the slight increase in demand, the full availability of new models and model launches. The share of all-electric vehicles in deliveries is set to increase significantly compared to 2023. The EBIT margin in the Automotive Segment is expected in a range of 8-10% in 2024.
