Written by | Eldon's Ring of Law
Edit | Routing Agency
At the same time as lowering its earnings forecast, it decided to invest more in electrification – the BMW Group demonstrated the determination and strength of the Bavarian company to the world at its annual financial report 2022.
Considering the uncertainty caused by the Russian-Ukrainian conflict to the global auto market, the group lowered its profit margin forecast for the auto business in 2022 on Wednesday (March 16).
The German luxury automaker believes that the situation in Russia and Ukraine will have an impact on supply chains and put pressure on the global economy.
For these reasons, the BMW Group predicts that the EBIT margin for its automotive division will be in the range of 7% to 9% in 2022.
It is for reference that in 2021, the group's profit margin exceeded 10%. In addition, without the impact of the Russian-Ukrainian conflict, BMW's original profit margin target range was 8%-10%.
The Russian-Ukrainian conflict has now led to the closure of factories in Russia or the suspension of operations in Russia by a number of multinational automakers, including Volkswagen, Renault and Mitsubishi. In this process, the terminal price of automotive products has also been continuously pushed up.
Several industry analysts have warned that if the situation does not stabilize, it will bring more trouble to the global auto manufacturing industry.
Supply chain problems remain significant
For the BMW Group, the most direct impact of the Russian-Ukrainian conflict will be reflected in the supply chain.
The company said it could still source some parts from western Ukraine. On the other hand, they are also trying to work with suppliers in other parts of the world to find alternatives to maintain normal production of new cars.
But BMW also warned that there could be further production disruptions in the coming weeks.
The automaker had expected to deliver more new cars in 2022, but now they've lowered their sales forecast to "level with 2021."
Last year, despite chip supply shortages like other competitors, the BMW Group's global sales reached a record 2.52 million units. In terms of financial performance, its EBIT margin for the same period was 10.3%, the highest level since 2017.
BMW said the Russian-Ukrainian conflict made it difficult for the group to give accurate guidance on 2022 results and to incorporate any potential long-term impact into its forecasts.
"We are optimistic about alleviating the shortage of wiring harnesses," Oliver Zipse, chairman of the BMW Group, told the media. BMW has more than one supplier in Europe, he said, enough to cope with the situation.
Chiptzer, Chairman of the BMW Group
Frank Weber, bmw group chief technology officer, expects that the situation in Russia and Ukraine will not have a long-term impact on BMW.
Frank Weber, Chief Technology Officer of the BMW Group
However, he also noted that the company, like most of its competitors, has a supply of wire harnesses mainly from Ukraine. Such wiring harnesses are mainly used in engines and gearboxes.
Weber said the number of people employed in Ukraine's automotive industry is about 20,000, mainly concentrated in the western part of the country.
"We don't want to simply cut jobs there. We have managed to restore the supply of wire harnesses. He said.
Weber said only a handful of BMW engines rely entirely on wiring harnesses made in Ukraine, so by next week the company should be able to resume normal production again.
The company also said that the shortage of semiconductor chips will continue for some time. So far, these problems have led to the restriction of many production lines in the global automotive industry.
As the complexity of the technology in the car field increases, so does the perception of the chip supply crisis among automakers, including BMW.
This meant that the company had to suspend the installation of touch screens in some of its models for a period of time.
But Weber noted that chip supply issues have not changed the company's overall electric vehicle expansion plans.
"Dealing with the challenge of the chip crisis requires a lot of effort." At a meeting on Wednesday, he said, "I'm proud of the team's approach to the chip crisis, our production systems and supply chain systems are very flexible and can react very quickly." Last year, this gave us a competitive edge. We believe this will remain so this year. ”
Weber expects chip supply shortages throughout 2022.
The BMW Group initially thought chip supply would return to normal in the second half of 2022, but now they believe that this will continue for a full year.
"Just like last year, this year we will still try to cope. We have not changed any product launch plans or production expectations due to chip shortages. Weber said.
The electrification strategy has not wavered
In what Weber calls the "unchanged plan," the transformation strategy toward electrification is one of them.
BMW said it expects 15 pure electric vehicles to be put into production this year, covering about 90% of the market segment, of which some models are already in the trial production stage.
In addition, the neue KLASSE model based on a new structure will start trial production at the Debrecen plant in Hungary in 2024 and will be unveiled in 2025. Such products will be powered by the sixth generation of eDrive electric drive systems with a completely redesigned IT and software architecture.
The company also said it is developing new battery technologies and trying to achieve its electrification goal as early as possible — that is, by the end of 2025, a total of 2 million pure electric vehicles will be delivered, and by 2030, pure electric vehicles will account for 50% of its global sales.
At that time, the annual sales volume of pure electric vehicles under the BMW Group will exceed 1.5 million units, and a total of 10 million pure electric vehicles will be delivered to customers. At the same time, the group's rolls-royce, MINI, BMW Motorrad and other three other major brands will also be fully electrified.
BMW has previously said that as the company's pure electric coupe BMW i4 and pure electric SUV iX open sales in major markets, it expects sales of its pure electric products to double in 2022.
BMW i4
BMW iX
Currently, the company is developing a pure electric version for the BMW 5 Series models as well as the BMW X1 entry-level SUV.
Previously, the company has launched the iX3 production model, which is a pure electric version of the best-selling SUV BMW X3, which is currently only available in China and Europe.
This means that almost all of the german luxury carmaker's most popular models will usher in a pure electric version. The most popular BMW 3 Series is an all-electric version, which is also believed to be in the testing process.
Thanks to the deep integration of BMW Brilliance, a joint venture in China, BMW believes that its overall revenue will usher in significant growth in 2022, including financial and motorcycle businesses.
In February, the BMW Group received approval from Chinese regulators to increase its stake in BMW Brilliance from 50% to 75%. So far, the group has also become one of the first Western automakers to benefit from China's liberalization of foreign ownership of passenger car manufacturers.
The group confirmed that the increase in its stake in BMW Brilliance will have a positive impact of 7 billion to 8 billion euros (about 49.035 billion yuan to 56.040 billion yuan) for the group's pre-tax profit.
At present, BMW Brilliance is responsible for the localization of some BMW brand models and iX3 pure electric SUVs sold in China and exported to the global market.
BMW i7, BMW's "capability collection"
At the annual meeting, the Bavarian car company also highlighted its new all-electric luxury car, the BMW i7.
Judging from the impact data that has been released so far, the BMW i7 will have a huge double kidney grille.
The BMW i7's double kidney grille is eye-catching
The double kidney grille is one of the BMW brand's most iconic design elements and the best way for the public to identify its products on the streets. Therefore, although the BMW i7, as an electric vehicle, lacks an engine that needs to be cooled under the hood, BMW still adds such a design to it, which is somewhat reasonable.
BMW said the i7's grille was "subversively interpreted, giving it a modern and unique atmospheric look." In the grille, for example, the manufacturer exclusively uses crystalled LED daytime running lights to outline them. This type of design helps to visually highlight the double kidney grille and attract more attention.
Borrowing the i7's debut, BMW Brand Product Manager Don Smith also responded to social media criticism that the double kidney grille was too exaggerated. He said that while the open grille seemed meaningless to a pure electric car, the brand's customers "wanted it to look like a BMW at first glance." Makes sense!
BMW said that when the BMW i7 was officially released in April this year, it would be "the world's first pure electric luxury car".
Although such a proposal may be opposed by the Mercedes-Benz EQS and Tesla Model S, BMW will certainly go all out to make its logic self-consistent.
According to the European WLTP standard, the BMW i7 will have a range of 580-610 km, while according to the EPA standard, its cruising range will reach 491 km. According to the WLTP standard, the comprehensive power consumption of the model is 19.7-18.9 kWh per 100 kilometers, which is lower than the level previously advertised by BMW.
The interior of the CABIN of the BMW i7 reveals the BMW Group's understanding of the era of intelligent electric from another perspective. The new car will be equipped with a 31-inch ultra-wide cinema screen with a 32:9 panoramic display format and 8K streaming resolution.
The above screen is located in the roof lining and can be removed by rear passengers. This design basically transforms this limousine into a luxurious mobile theater. At the same time, the BMW i7 will also be equipped with a Sky Lounge panoramic glass roof with LED light lines. This also adds a lot of imagination to how the two interact.
In the main driving position, the integrated suspended curved screen will start from the back of the steering wheel and extend to half of the dashboard. The display system includes a 12.3-inch digital instrument cluster and a 14.9-inch central infotainment screen. The two combine and lean slightly towards the driver position.
In this human-computer interaction system, the latest version of the BMW iDrive software will also play its role.
"The 7 Series is not just our product, it's also a collection of our capabilities. Not only is the i7 the most powerful electric car we're going to make, it's got a lot to play with. For example, the second row of passengers can be provided with a cinematic experience, and the doors can be opened and closed automatically. Frank Weber, BMW Group chief technology officer, said, "It has an art model, so there's real digital art hidden in the car." ”
However, Weber did not disclose more details about the so-called "art model".
BMW's big picture and pragmatism
In an interview on Wednesday, Weber also stressed that BMW Group is currently cooperating with technology companies such as Qualcomm and Arriver, which will be the backing of BMW Group's software technology in the field of smart mobility.
While such cooperation will not help the BMW Group alleviate problems such as chip shortages, it will give the company a greater say in autonomous driving and infotainment technologies.
BMW believes that this cross-border partnership provides an example of the company's recent practice of "thinking about supply chain issues in a more global way".
"Like it or not, what we are facing right now is a globalized economy. Developing one-sided solutions to regional problems without thinking about how to make rational use of all available advantages on a global scale makes us a major obstacle in the process of producing excellent products. "I can barely imagine going back to that era. We are all connected. ”
This may be the big picture view of the BMW Group.
As for the overall transformation to electric vehicles, Weber is well aware that the BMW Group has not set a "final judgment day" for fuel vehicles.
He believes that the charging infrastructure must be in place before full electrification can be achieved. This includes not only green power facilities for charging cars, but also sustainable industrial chains for making batteries.
Until then, the BMW Group wants to reduce the use of internal combustion technology and increase sales of its pure electric vehicles.
And this reflects BMW's pragmatism.
"The last point I want to make may seem politically correct, but it is also true. To achieve a goal, simply cutting off its opposites will not work. You have to make sure that the favorable factors go up the slash, the bad ones go down, and the two forces go hand in hand to make things go smoothly. The BMW Group's chief technology officer concluded, "This change is about larger industrial processes, not just a single model." ”
Weber also seems to be quite optimistic about hydrogen energy.
This year, the BMW iX5 Hydrogen fuel cell vehicle will undergo small-scale mass production. The BMW Group expects that around 2025, hydrogen fuel cell technology will have an increasing proportion of the drive system portfolio.
BMW iX5 Hydrogen
But Weber also said that hydrogen power may be friendlier to heavy-duty trucks than private cars, mainly because trucks can carry enough battery weight to support their battery life.
Write at the end:
In addition to the above core information, the BMW Group also released some forward signals for the future at yesterday's annual meeting.
For example, the introduction of a new standard for the BMW iFACTORY production network. The standard will be based on the three principles of lean, green and digital, providing a global solution for the transformation of the BMW Group's production network in the electric era.
BMW said that the BMW iFACTORY standard will be applied to all of the Group's global plants, including three vehicle plants and one powertrain plant at the Shenyang production base.
For example, the BMW Group also announced that it has concluded a partnership with BOWENSIEPEN to obtain the right to use the ALPINA brand. The move will further enrich the group's first-class car camp.
Founded in 1965, BOVENSIEPEN has long been active in the bmw engine tuning and racing field, starting production of passenger cars based on BMW products in 1978.
In the future, the two sides will carry out new forms of cooperation. By the end of 2025, BOVENSIEPEN will continue to develop, manufacture and sell BMW ALPINA vehicles.
-END-