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Columbia Business Monthly

BMW Group Posts Significantly Improved 3Q Performance

By David Dykes

The BMW Group reported increased sales volume and net profit in the third quarter of 2020 and, at the nine-month stage, said it is on track to meet its targets for the full year.

The BMW Group was able to benefit during the third quarter from regional upturns in demand as well as from the model portfolio offered to customers, company officials said.

At the same time, cost efficiency and cash management remain decisive factors in coping with the ongoing impact of the coronavirus pandemic in its varying regional forms to the best possible extent, the officials said.

“The third-quarter performance underlines the BMW Group’s operational strength and ability to perform well within a challenging environment,” said Oliver Zipse, chairman of the Board of Management of BMW AG, in Munich. “We improved Group earnings compared to one year earlier and are therefore firmly on track towards achieving our targets for the full year. We manage our day-to-day operations closely, taking regional fluctuations in demand into account, and can respond to changing market situations at any time.”

The Wall Street Journal reported the sale of BMW-branded vehicles rose 9.8 percent in the third quarter, driven by a 31 percent surge in sales in China, which helped dull the effect of a 16 percent drop in U.S. sales.

In the nine months to Sept. 30, BMW’s overall new vehicle sales fell 12.5 percent to 1.64 million vehicles, pulled down by a 25 percent drop in U.S. sales and a 20 percent decline in Europe, the newspaper reported.

It said BMW’s net profit rose to €1.79 billion, equivalent to $2.1 billion, in the quarter, from €1.52 billion a year earlier.

At its Spartanburg plant, BMW Manufacturing produces more than 1,500 vehicles a day and exports 70 percent of its production.

The factory is the global producer of the BMW X3, X3 M, X5, X5 M and X7 Sports Activity Vehicles and X4, X4 M, X6 and X6 M Sports Activity Coupes.

Since the start of production in 1994 the plant has produced over 5 million vehicles.

Meanwhile, the BMW Group and Mercedes-Benz AG said earlier this year they are putting their cooperation on development of next-generation technology for automated driving temporarily on hold.

Following extensive review, the two companies said in a joint statement they arrived at a “mutual and amicable” agreement to concentrate on their existing development paths – which might also include working with current or new partners. 

Both emphasized they might cooperate at a later date and that the companies’ underlying approach to matters such as safety and customer benefits in the field of automated driving remains “highly compatible.”

The BMW Group and Mercedes-Benz AG both are working separately on current generations for highly automated driving and have achieved what they said is “major progress.”

However, BMW and Mercedes-Benz said they were unable to hold “detailed expert discussions” and talk to suppliers about technology roadmaps until a contract was signed last year. 

In those talks – and after extensive review – both sides concluded that, in view of the expense involved in creating a shared technology platform, as well as current business and economic conditions, the timing wasn’t right for successful implementation of the cooperation, the companies said. 

Both companies stressed they would continue working in “close cooperation” in other areas as planned.

The Mercedes-Benz Vans plant in Ladson assembles Sprinter vans for the U.S. and Canadian market under the brands Mercedes-Benz and Freightliner. 
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