bmw lowers its earnings guidance. how can the electrification transformation balance “offense and defense”?
2024-09-19
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bmw group recently adjusted its performance guidance for fiscal year 2024, with several key figures lower than previously expected. bmw group said that the integrated braking system provided by the supplier stopped during the relevant delivery process and there were other technical issues. in addition, the fierce competition pressure in the chinese market also had an impact.
in fact, multinational automakers including bmw are facing a series of challenges from transformation. in the first half of this year, the revenue and profits of the three major luxury car brands mercedes-benz, bmw and audi all fell. volkswagen group is about to end its 30-year employment guarantee agreement after planning to close its german auto production and parts factories.
ren wanfu, an automotive industry analyst, said in an interview with beijing news beike financial reporter that the new energy vehicle revolution initiated by the chinese market is spreading from the chinese market to the global market. for luxury brands and multinational automakers, they need to strike a balance between being conservative and innovative.
bmw lowers several key performance data, volkswagen may close two factories in germany
bmw adjusted its performance guidance for the 2024 fiscal year, including delivery volume, ebit margin, return on capital employed and other data. specifically, compared with the same period last year, the bmw group expects a slight year-on-year decrease in delivery volume, which was previously expected to increase slightly; the ebit margin is expected to be between 6% and 7% in 2024, which was previously 8%-10%; the return on capital employed is expected to be between 11% and 13%, which was previously 15% to 20%.
bmw said that technical issues related to the integrated braking system affected more than 1.5 million of the brand's vehicles and would result in additional high warranty costs in the third quarter. it is reported that the above-mentioned integrated braking system is provided by continental ag of germany. continental also mentioned in a statement that some electronic components may be damaged to a certain extent, resulting in "a small part" of the braking systems it produces and supplies to the bmw group to be replaced. in addition, bmw also said that it was related to competitive pressure in important asian markets such as china. influenced by this news, many institutions have lowered the target share price of the bmw group.
in fact, as giants in the era of fuel vehicles, multinational automakers face pressure in transformation.
recently, volkswagen group said it is considering closing a car factory and a parts factory in germany to cut costs. this will be the first time in volkswagen's history that a german factory has been closed. in addition, volkswagen group is about to end the 30-year employment guarantee agreement that volkswagen has previously agreed to, which stipulates that volkswagen cannot lay off employees at its six factories in germany until 2029.
behind this series of actions is the pressure that volkswagen group faces in its transformation, which is to increase the utilization rate of volkswagen passenger car brands. mei songlin, a senior analyst in the automotive industry, believes that it is not easy for the "elephant to turn around". the demand for electrification in the european domestic market has slowed down, while the electrification transformation in the chinese market has accelerated, and domestic brands have continued to squeeze the market share of multinational automakers.
multinational automakers need to accelerate their transformation
in the first half of this year, the revenue and profits of the three major german luxury car companies all declined to varying degrees, and all mentioned that the increasingly fierce competition in the chinese market had a significant impact on their performance. volkswagen group's revenue increased but its profit did not increase in the first half of this year. in its semi-annual report, it mentioned that its sales in the chinese market fell by 7.4% in the first half of this year, and the chinese market was highly competitive.
gao xiang, president and ceo of bmw group greater china, expressed that he hopes to maintain his own pace as much as possible and achieve a balance between sales pace and sales quality. in addition, he will enhance local r&d capabilities and optimize cooperation with chinese technology companies. in terms of electrification, according to the plan, the new generation of models will start production next year, and will be domestically produced in shenyang in 2026, and the electrification process will continue to be promoted in the chinese market.
audi said that it will launch the first model of the ppe platform in the chinese market next year, and will also launch a new generation of local models based on the ppc luxury fuel vehicle platform, planning to comprehensively upgrade its product lineup in the chinese market. mercedes-benz plans to start production of the new pure electric long-wheelbase cla model exclusively for china from 2025.
in fact, judging from the performance of other multinational automakers in the first half of the year, they are also facing transformation pressure. ford's revenue increased but its profit did not in the first half of the year, and its sales in the chinese market declined; gm has not yet turned a profit in the chinese market, and its market share has further declined year-on-year; the performance of many japanese and korean automakers in the first half of the year did not meet expectations.
ren wanfu said that the market share of multinational automakers in china has been further eroded by chinese auto brands. in mei songlin's view, the chinese auto market has always been developed by the interweaving of local brands and foreign brands (including joint ventures and imported brands). when the quality of local brands improves, the quality advantage of foreign brands will be significantly reduced.
mei songlin further explained that multinational automakers such as luxury car brands still need to work hard to transform into smart electrification. the strong rise of new brands including tesla, nio, ideal, and wenjie has squeezed the market of multinational automakers.
recently, a reporter from beijing news shell finance visited several joint venture brand 4s stores in the beijing area and found that many joint venture brands' fuel vehicles and new energy vehicles have different degrees of promotion activities. a salesperson at a bmw 4s store in the beijing area said that there is currently a mid-autumn festival event with great price discounts. for example, the 5 series can be discounted by nearly 140,000 yuan, and the 2 series can be discounted by more than 100,000 yuan. a salesperson at a faw-volkswagen 4s store said that the store's promotion during the mid-autumn festival is very strong. for example, the lanxun can be discounted by nearly 100,000 yuan, the lanjing can be discounted by more than 50,000 yuan, and the id.4 crozz and id.6 crozz can be discounted by more than 60,000 yuan.
in mei songlin's view, once the quality of local brands reaches the expectations of consumers, their cost-effectiveness advantage will be reflected, which in turn forces foreign brands to improve their cost-effectiveness. the development of multinational automakers in the chinese market has reached a stage where they need to change. they cannot rely on one model to survive in the chinese market. now they have reached the stage of true localization. this change is to rise from relying solely on quality competition to relying on quality and cost-effective competition.
ren wanfu said that the chinese auto market is accelerating its transformation to electrification, and multinational automakers should increase their research and development in the field of new energy vehicles and conduct secondary development of localized products based on the needs of the chinese market. "how to accelerate and promote the transformation to intelligence and electrification may be the key to whether multinational automakers can survive and be competitive in the chinese market in the future."
wang linlin, financial reporter of beijing news shell
editor: yue caizhou
proofread by lucy
