uDespite the political discussion, the Munich BMW group is sticking to its expansion plans in China. “We are striving for a partnership between Germany and China,” CFO Nicolas Peter told journalists in Munich on Monday. The global car industry thrives on cooperation, especially in electromobility and digitization.
As an example, Peter mentioned the cooperation with the Chinese battery cell manufacturer CATL, which is planning to build a huge battery factory in Debrecen. In the Hungarian city, BMW recently inaugurated its newest plant to build electric cars there. China is also the world’s largest car market, and BMW wants to be “close to the customer” there and “take advantage of logistical advantages,” said Peter.
The expansion plans are controversial given the new geopolitical and trade tensions. Since the Russian invasion of Ukraine, the debate about the heavy dependence of German companies on the Chinese market has intensified.
Federal Minister of Economics Robert Habeck wants to slow down the China business of German companies and publicly calls for tougher dealings with the authoritarian regime. But BMW continues to emphasize how important the business in the People’s Republic is for their own corporate goals.
On a “roller coaster ride” in China
At the beginning of February, the government in Beijing allowed BMW to become the first western car company to take over a majority stake in a Chinese joint venture – namely the one with Brilliance (BBA). Around 25,000 employees and more than 700,000 cars from the Far East were immediately included in the balance sheet, and the full consolidation of the Chinese joint venture alone increased the financial result by 7.7 billion euros.
And if Peter now talks about “being well on the way” in order to be able to achieve sales and profit targets in the current year, this is not least due to the China business. Although the market development there was a “roller coaster ride” – after a good start and a hard lockdown, there are now double-digit percentage growth rates again – but by the end of the year BMW will certainly have sold more cars than in the previous year, said Peter.
In the middle of the year, the Management Board lowered the global sales forecast for the year as a whole. Peter assumes 2.45 million sales for the year, which corresponds to a slight decrease compared to the previous year. The sales lost in the first half of the year can no longer be made up, even if things are going a little better in the second half of the year. Like other car manufacturers, delivery bottlenecks in components such as semiconductors also caused problems for BMW.
The Chief Financial Officer assessed the effects of the gas crisis less critically. BMW is not directly affected by this. So far there have been no failures at suppliers. In the coming year, BMW wants to return to the path of growth and increase car sales. This year, this will only be possible with fully electric vehicles, which are expected to account for 10 percent of sales for the first time with 245,000 units. And in 2023 BMW wants to sell around 400,000 Stromer.
