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BMW Group releases 2016 Annual Report

Wednesday, March 22, 2017   (0 Comments)
Posted by: Wes Fleming

What Motorrad fans need to know from BMW's 2016 annual report

BMW Motorrad set an all-time sales record of 145,032 motorcycles and scooters sold in 2016. BMW Group earned $10.44 billion of profit (before tax) in 2016, up 4.8% from 2015. Net profit is listed at $7.46 billion. Total Group revenues in the Americas - which includes the United States - fell from $25.18 million in 2015 to $22.38 million in 2016. (NOTE: All conversion rates from euros to dollars are taken from the market on 22 March 2017 and may not reflect the exact figures expressed in euros by BMW Group in the Annual Report.)

Motorcycle revenues for BMW Group were $2.23 billion in 2016, up 4% from $2.15 billion in 2015. Compared to the automotive side, this is a tiny slice of BMW's revenues - the car segment saw $93.4 billion in revenue in 2016, by far the largest contribution to the Group's total 2016 revenues of $101.78 billion.

The gross profit margin for the motorcycle segment fell from 22.5% in 2015 to 20.8% in 2016, and according to the Report, did so "mainly due to higher expenses incurred in conjunction with the implementation of the segment’s new strategy and the expansion of its model range." Total profit before tax for the motorcycle segment in 2016 was $199.8 million, up 3.4% from 2015.

BMW expects the US market in 2017 to be about what it was in 2016, but it looks like 2017 is going to be an exciting year. The annual report states that "Motorcycle fans can also look forward to new models this year with 14 market launches from BMW Motorrad." Riders will be able to see them at one of BMW Motorrad’s 1,180 dealerships worldwide, a number BMW has said in the past they are working to increase. BMW has also set a goal of selling 200,000 motorcycles and scooters a year by 2020.

BMW's manufacturing facilities - 19 of them around the world - include a number of plants making motorcycles and motorcycle parts. Motorcycles are made in Berlin, Germany; Manaus, Brazil; and Rayong, Thailand. Aluminum fuel tanks are made in Eisenach, Germany. Also mentioned is the TVS Motor Company partner plant in Hosur, India, where the new 300cc G-series singles are being made.

The annual report briefly discusses the global motorcycle market, saying: "Since the beginning of the financial year 2016, market analysis has been expanded from the half-litre class (500 cc) to cover the entire 250 cc plus class. This follows BMW Motorrad’s entrance with the entry-level G 310 R model into a new market segment within the250 cc plus class.

"Global motorcycle markets in the 250 cc plus class were flat year-on-year, mainly reflecting weaker performance in some overseas regions (+/–0.0%). The European market grew by 12.4% overall, benefiting primarily from the significant recovery in Southern Europe. While the French market grew by an encouraging 6.7%, markets in Germany, Italy and Spain all recorded double-digit increases, expanding by 13.9%, 12.8% and 23.5% respectively. The US market finished 3.8% down year-on-year."

The annual report also reminds us that, while motorcycle sales were down in the US, they were up globally: "In a highly favourable market environment, most notably in Europe, BMW Motorrad reported a solid 5.9% increase, with 145,032 units sold (2015: 136,963 units). These figures benefited from unexpectedly good sales figures for Europe and Latin America.”

The most detailed look at the motorcycles segment comes on page 48 of the report. Europe continues to be the market leader for BMW Motorrad, with sales up 7.5% there overall, including the world-leading German sales number of 24,894 units sold in 2016, up 4.5% from 2015. They reiterated the disappointed sales levels in the USA, which fell 16.8% from 16,501 units in 2015 to 13,730 in 2016. France - which has a population just a fraction the size of the USA - was responsible for 13,350 unit sales, up 6.4% from 2015.

The report provides further detail: "A total of 145,555 motorcycles rolled off production lines during the year under report (2015: 151,004 units; –3.6%). The slight drop was largely attributable to the higher number of new model production start-ups in the second half of 2016 compared to one year earlier.

"Started in 2015, expansion work on the BMW Group plant in Berlin continued during the year under report. In addition to measures to increase production capacity, a state-of the-art logistics centre is being built near the Berlin plant and scheduled to begin operations from the end of 2017."

Global sales for BMW Motorrad broke down as follows: 17.2% Germany, 9.5% USA, 9.2% France, 8.5% Italy, 6.6% Spain, 5.8% Great Britain, 43.2% Other (i.e. the rest of the world).

BMW also uses the annual report to tout their technological advancements, specifically mentioning the HP4 RACE: "BMW Motorrad demonstrated with the exclusive BMW HP4 RACE experimental motorcycle how extreme lightweight construction can be realised based on carbon fibre technology. Among other features, this motorcycle, which is fit for racing, is equipped with a highly innovative frame structure made of pure carbon as well as carbon wheel-rims."

As of December 31, 2016, BMW Motorrad employed 3,351 people, a 10.9% rise from the end of 2015. The report also discusses BMW's commitment to younger employees through its apprenticeship program, especially in plants located in the USA and Thailand.

One of the most interesting items in the report is the Ten-Year Comparison table, where unit sales figures back to 2007 show a steady increase in numbers. Most years showed a steady rise over the previous year, the clear exception being 2013. Much if that year's big bump could probably be attributed to the release of the water-cooled boxer motorcycles.

 

Sales Volume 2016 2015 2014 2013 2012
Motorcycles 145,032 136,963 123,495 115,215 106,358
Production Volume 2016 2015 2014 2013 2012
Motorcycles 145,555 151,004 133,615 110,127 113,811

 

Sales Volume 2011 2010 2009 2008 2007
Motorcycles 104,286 98,047 87,306 101,685 102,467
Production Volume 2011 2010 2009 2008 2007
Motorcycles 110,360 99,236 82,631 104,220 104,396

 

NOTE: Motorcycle sales and production figures exclude Husqvarna (2013).


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