Inspirational! BMW sells used cars to become the global sales champion
Text/Zeng Jia
For a person who writes about the car company conference for three days, the conference is basically linked to the boring word.
But as a certain art master said, you see the stone, I see the lion, so his lion liberated (carved) out of the stone.
Through bmw's press conference, can we liberate deep industry information (lion)? Let's give it a try.
What is the future of a joint venture? BMW Brilliance was merged into BMW's earnings report
Founded in 2003, BMW Brilliance Automotive Co., Ltd. is the first step for the BMW Group to enter the Chinese automotive market. Affected by the automotive industry policy in 1994, BMW Group's holding of BMW Brilliance has remained at 50%, not one step beyond the thunder pool.
With the improvement of market openness and the continuous development of the automotive industry, the policy direction has gradually shifted from protecting local enterprises and absorbing foreign enterprises' technologies to introducing competition and accelerating innovation. Since 2018, the foreign equity restrictions on new energy vehicles and commercial vehicles have been abolished one by one.
At the beginning of this year, the abolition of the passenger car stock ratio restriction is also the beginning of the complete opening up of the mainland automotive industry.
BMW did not miss this opportunity, and from February 11, 2022, the new joint venture contract of BMW Brilliance, a joint venture of the BMW Group in China, came into effect, and the validity period of the joint venture cooperation was extended to 2040.
More importantly, from February 11, the BMW Group's stake in BMW Brilliance was changed to 75%, and at yesterday's press conference, the BMW Group announced that it would merge BMW Brilliance into the subsequent financial statements.
As early as 18 years ago, bmw group announced that it would acquire part of the equity of BMW Brilliance for 3.6 billion euros, increasing its shareholding ratio to 75%. Eager to try it for three years, BMW finally became the first foreign-funded company in the passenger car field to eat crabs.
BMW Brilliance is expected to have a positive impact of 7-8 billion euros for the BMW Group in 2022.
Yes, from 50:50 to 25:75 change, the most intuitive impact will be reflected in the distribution of benefits, taking 19 years as an example, BMW Brilliance brought a net profit of 7.626 billion yuan to Brilliance Group, if the equity of BMW Group is increased to 75%, then the net profit obtained by Brilliance Group in this year will be reduced by at least 3.8 billion yuan.
After the policy red line disappeared, many foreign enterprises moved by the wind.
On January 27, Stellantis Group said in a statement on its official website that it "increased its shareholding in GAC FCA, a joint venture with GAC Group, from 50% to 75%." However, gaga motor responded that "this release is not approved by us".
In the field of electric vehicles, Volkswagen has completed the capital increase of the joint venture Volkswagen Anhui in December 2020, and the Volkswagen share ratio has reached 75%.
There are also examples of capital increases by local companies: In February last year, Denza New Energy Vehicle announced that the shareholding ratio between Daimler and BYD changed from 50:50 to 10:90.
The competition for the right to speak and distribute the interests of joint ventures may be the most significant phenomenon in the automotive industry after the liberalization of the shareholding ratio restriction.
For example, BMW, after seeing the strong demand in the Chinese market, has more autonomy to lay the foundation for the subsequent introduction of new products and the landing of decisions.
In 21 years, the BMW Group delivered 846,000 BMW and MINI vehicles in the Chinese market, an increase of 8.9% year-on-year, and the total sales volume ranked first in the high-end car market. Among them, the sales of new energy models exceeded 48,000 units, an increase of 69.6% year-on-year.
According to the announcement on the official website, in the future, BMW will also launch a pure electric BMW 3 Series Long-Wheelbase for the Chinese market, and realize the local production of some models of the BWM X5 series in China.
Combined with volkswagen's previous actions, whether BMW will also set up a research and development center and a design center in China to tailor new cars for Chinese consumers is a reverie.
BMW's transformation path aimed at the luxury car market
Electrification transformation, unsurprisingly, is the key word of the BMW Group's press conference, and it is also a change of the times that cannot be avoided.
At other press conferences, more than one million expected electric vehicle deliveries were seen, and BMW is the first so far to expect deliveries to reach 10 million by 2030. Taken together, one wonders if the electric vehicle market would have been so big at the time.
It is worth mentioning that it is expected that BMW's Rolls-Royce and motorcycle urban mobility series will all be electrified in 2030.
Combined with Volkswagen's push for new Porsche brand electric vehicles, car giants have set their sights on the luxury car market. In this regard, BMW's new generation BMW 7 Series, as BMW Group Chairman Chiptze puts it, "is the next trump card in our growth strategy in the luxury car sector." ”
The all-electric BMW i7, which debuted worldwide in April with it, has also attracted much attention, especially the 31-inch "BMW Suspension Giant Screen" shown in its trailer.
It is conceived that the cinema screen (front finger giant screen) is seamlessly connected with the skylight, usually folded in the roof glass, and can be presented to the rear passengers at any time when needed. It has 8K resolution and 5G interconnection, and is nearly 1 meter wide.
In-car cinema is a dream of many people, but how effective is it achieved? This has to be said after the consumer experience.
Hidden corners, the used car market with flying auto finance industry
Joint ventures, auto finance, these two keywords always appear repeatedly in the BMW Group's financial reports. Just as the coffee companion is milk, the former's literal companion is "business in China" and the latter is "used car market".
"Financial Services segment", the documentation comes with translation is the financial services unit. In a business that doesn't seem to have anything to do with electric vehicles, passenger cars, and commercial vehicles, EBIT accounts for a quarter of the Group's EBIT (BMW Group EBIT 16.06 billion euros; financial business EBIT 3.753 billion euros).
Its encyclopedia is about the financial activities that finance the production, circulation and consumption of automobiles. It mainly includes capital raising, credit utilization, mortgage discounting, securities issuance and trading, and related insurance and investment activities.
"They are all typical Chinese cannot be understood when they are connected together".
So it's better to just look at its impact on life. Simply put, when the buyer is tight, you can apply for a discount, installment payment or loan from the auto finance company. The biggest difference between auto financial services and banks is that they can only be used when buying a car.
In foreign countries, auto finance has become a major component of auto companies' revenue; 5 years ago, the penetration rate of auto finance in the United States has reached 85%, 75% in Germany, and 70% in France.
The development of auto finance is the result of the sharp rise in demand for increased purchases in the auto market.
The wave of core shortages continues, and while the price of new cars rises, the delivery date is constantly postponed, which cannot meet the strong market demand.
The result is a booming used car market.
Take the United States, the world's second largest auto stock market, for example, according to the U.S. Bureau of Labor Statistics (U.S. According to the Bureau of Labor Statistics, the price of used cars in the United States has increased by 39.8% since March 2020. During the same period, the price of new cars in the United States rose by only 8.9%, and the overall inflation rate in the United States was 6.3%.
CarMax chief marketing officer Jim Leski said in an interview: "There are not so many new cars in the market, consumers' first choice can not be realized, they can only retreat to the second; some consumers can not wait for the new car to be produced." So they all went into the used car market. ”
The expansion of the second-hand car market cannot be described simply as "adding wings to high-end models such as BMW". Under the global impact of the lack of cores, the BMW Group's delivery volume in 21 years can reach 2.521 million units, an increase of 8.4% year-on-year, and the financial business constitutes 23.7% of the total EBIT, an increase of 117% year-on-year.
Revenue directly reached a staggering 111.239 billion euros, which translates into RMB 2.1 billion per day in 2021.
Volkswagen will distribute chips according to luxury cars, while BMW develops the second-hand car market, the lack of core tide hits the electrification transformation, and car companies see tricks to increase revenue, which is quite interesting.
As the great master Rodin said, there is no shortage of beauty (interesting information) in life, only the eyes that find it. Seeing the lion in the stone is also digging into the market dynamics and industry prospects behind the actions of the enterprise.
Do you think it is interesting to watch the conference in this way?