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Author | Wang Xiaojuan

Editor | Zhou Zhiyu

One month after voluntarily withdrawing from the price war, BMW submitted its second quarter report.

On August 1, the BMW Group released its second quarter financial report for 2024. In that quarter, BMW's overall sales were 36.94 billion euros (about 288.8 billion yuan), a slight decrease of 0.7% year-on-year.

However, the revenue of the automotive sector, which accounts for the main revenue, did not decline. The sector's revenue was 32.07 billion euros (about 250.8 billion yuan), an increase of 1.4% year-on-year.

From the perspective of revenue, BMW's performance has not fluctuated much compared to the same period, but its profits have declined.

In the second quarter, the BMW Group's EBIT was 3.88 billion euros (about 30.3 billion yuan), a year-on-year decrease of 10.7%. The EBIT margin of the automotive business was 8.4%, down 0.8 percentage points from 9.2% in the same period last year.

BMW explained that the decline in profits was mainly due to increased production and personnel expenses as well as increased IT project costs.

In the first half of the year, BMW's R&D investment reached 4.169 billion euros (about 32.597 billion yuan), an increase of 22.8% year-on-year. This investment is much higher than the annual revenue of some new forces.

BMW expects that its R&D investment this year will reach a historical peak, and the proportion of R&D in total revenue will exceed 5%.

In addition, the decline in profits was also affected by changes in demand and the macro environment.

Especially in its main market of China, BMW's price reduction strategy has not boosted sales as expected. Its global total deliveries in the second quarter were 618,700 vehicles, a year-on-year decrease of 1.3%, while its sales in the Chinese market were 188,500 vehicles, a year-on-year decrease of 4.7%.

As a company that has been a leader in the automotive industry for a century, BMW has the confidence to face short-term storms.

According to the second quarter financial report, BMW's net profit was 30.3 billion yuan, equivalent to 330 million yuan a day. Many car companies have begun to suffer losses or have been losing money. In comparison, BMW has no major problems.

Of course, BMW did not just sit there and wait, but took the initiative to attack. It adjusted production capacity, withdrew from price wars, and supported dealers to make steady progress, which was also a preparation for a counterattack later.

Although the late electrification process has caused BMW's electric vehicles to be criticized as "converting oil to electricity", it has also become a loophole that tears open BMW's stable prices.

But nowadays, BMW's electrification process is getting faster and faster, and it has not been affected by the slowdown in electrification by some car companies, especially in China.

The reason for the decline in profits was attributed to the decline in sales in the Chinese market, but currently, the Chinese market is still the BMW Group's largest single market in the world, accounting for more than 30%.

This year, BMW plans to provide 11 pure electric models for the Chinese market, many of which will be launched in the second half of the year. The new generation of models planned by BMW has entered the peak period of R&D investment and is expected to be domestically produced in Shenyang in 2026.

BMW has invested a large amount of R&D funds this year, which have flowed into vehicle connectivity, autonomous driving and software stacks, which are the most popular directions in the current industry and the directions in which car companies are flocking to tell stories. It is worth mentioning that BMW is also one of the first car companies to obtain L3 pilot licenses in the domestic market.

After 30 years in China, BMW is widely recognized as a luxury car. Even though many young consumers choose current new energy brands, the fans that BMW has accumulated in the past can still provide it with a considerable market in second- and third-tier cities.

China is also one of BMW's most important strategic markets.

BMW has a very complete R&D system in China, with R&D bases in Beijing, Shanghai, Shenyang and Nanjing. At the same time, the R&D team in China has increased three times in the past three years, and currently has more than 3,000 R&D personnel.

Once upon a time, BMW made a lot of money because of its accumulation in sports, performance and other aspects.

Now that huge amounts of R&D funds have been invested, BMW is still accelerating in this long race in the automotive industry.