BMW has posted a record sales year, and it is planning to radically alter the technology paradigm of its mainstream model ranges to meet the EU's stringent 2021 emissions regulations.
IHS Automotive perspective | |
Significance | The BMW Group has sold more than 2 million units in 2014 for the first time, rising 7.9% y/y to 2,117,965 units, and it is also planning a major technology assault in which all-wheel drive range-extending EVs will become a core component of the model range. |
Implications | BMW is likely to have retained a healthy lead in the global premium passenger car market as a result of the full-year sales figures, although Audi and Mercedes-Benz have yet to publish theirs. In order to keep its lead in the global premium car market BMW is investing heavily in its technology capabilities and is planning a fundamental shift in its engineering and powertrain philosophy on its mainstream model ranges which is currently being formulated by its advanced engineering department. |
Outlook | BMW's current positive sales growth is likely to continue in 2015 according to IHS Automotive's current forecast which has Group sales rising by 9% to2.30 million units. |
The BMW Group sold more than 2 million units for the first time in 2014, with its final full-year sales tally rising by 7.9% year on year (y/y) to 2,117.965 units, according to a company press release. BMW's main rivals Mercedes-Benz and Audi have yet to announce their full year sales result but BMW is likely to retain a healthy lead in the global premium passenger car market. BMW finished the year extremely strongly with a 15,2% y/y increase in sales to 215,217 units in December. Commenting on the result the company's board member for sales and marketing Ian Robertson said, "I am delighted that we achieved our target of selling more than two million vehicles in 2014, a new record for the BMW Group. We have seen good growth throughout the year, well spread across all major sales regions. Our new models such as the BMW X4 and BMW 2 Series Active Tourer demonstrate our ability to develop new vehicles which attract new customers to the brand. The popularity of the BMW i3 and BMW i8 shows our game-changing 'born electric' strategy is on track. We are now looking forward to building on these successes in 2015."
The BMW brand recorded its best ever year with deliveries rising by 9.5% y/y to 1,811,719 units, while BMW brand sales in December also reached a record high of 177,954 units, an increase of 14.2% y/y. On a model-by-model basis the 3-Series managed a 2% y/y uplift to 476,792 units which was impressive given the F30 variant was entering its third year on sale; while in its first full year on sale the 4-Series posted a highly impressive sales figure of 119,580 units. One of the most impressive performances was from the 5-Series which generated a combined global uplift of 1.7% y/y to 373,053 units, despite the current F10 model entering its fifth year on sale during 2014, although it also benefited from a mid-life refresh last year. The BMW X4, which went on sale in July, has been delivered to 21,688 customers while the new third-generation BMW X5 has increased sales by 37.4% y/y to a highly impressive 147,381 units. In its first full year on the market, the BMW 2-Series Coupé has been delivered to a total of 27,933 customers while 13,091 customers have taken delivery of the 2 Series Active Tourer in the three months it has been on sale. Despite the introduction of the new Mini hatchback earlier this year, sales of the brand actually declined by 1.0% y/y to 302,193 units as the new model came on stream. However, the brand had its best ever final quarter as the new model came on stream, with sales rising 17.2% y/y to 94,624 units. In December, sales of the new three-door hatch were up 33.9% y/y (16,418 from 12,262) while a total of 6,954 customers took delivery of a five-door Mini in the last month of 2014. Mini Countryman sales grew 5.0% y/y (106,995/101,897) while deliveries of the Mini Paceman totalled 15,567 in 2014, an increase of 6.0% from 2013's 14,687.
In an attempt to maintain its global lead in the premium car market BMW is reported by Autocar to be formulating a new technology and vehicle platform strategy that will have a fundamental effect on the core engineering philosophy of BMW's future models. The new strategy is currently being formulated by BMW's advanced engineering department according to the report and it may switch all core models from being rear-wheel drive cars with welded steel to all-wheel drive with range-extending powertrains with an electric vehicle (EV) component as the primary power source, with bodies and vehicle structures made of a mixture of steel, aluminium and composites. The electric motor will be supported by a large battery pack with a small and ultra-efficient, compact high technology internal combustion engine (ICE) acting as a generator which would run at peak efficiency. There will also be a significant emphasis on aerodynamics and lowering rolling resistance in order to significantly improve high-speed efficiency. BMW's plan to offer all its cars from the 3-Series up as plug-in hybrids has made BMW fundamentally examine its technology and engineering philosophy according to the report. In order to offset the weight of battery packs the company will lower the weight of body shells using an advanced material mix which that reportedly debut on the new 7-Series, which is due out later this year. The first-generation PHEV 3-Series will debut next year and the next-generation 3-Series hybrid will feature a significant leap in the vehicle's technology paradigm, the new-generation engine runs as a lean-burn generator for the vast majority of the time to keep the batteries charged. The new hybrid powertrain will offer part-time and permanent all-wheel drive and can be scaled across all models. So although the new, simplified generator motors might come in different sizes and capacities, as will the supporting battery packs, this powertrain can largely be shared between everything from a 3-Series to an X5 SUV. This will save BMW a huge amount of money in production and research and development costs. The company is already working on advanced PHEV prototype systems that can have different focuses on performance and efficiency.
Outlook and implications
BMW has enjoyed another very strong year in 2014 as the volume premium carmakers continue to find themselves in a very strong position as a result of ongoing demand for their models in all the major global regional markets, with demand for these brands clearly outstripping more mainstream rivals. Daimler CEO Dieter Zetsche said earlier this week that China would become the key battleground between the big-three premium OEMs in the medium and short term and there is no doubt that BMW has made strong progress in this market in 2014, with sales rising by 16.7% y/y to 455,979 BMW Group vehicles, with BMW likely to marginally close the gap to Chinese premium market leader Audi. Sales in Europe and the US also developed positively with sales up in the former by 6.4% y/y to 913,803 units and in the latter by 5.3% y/y to 395,850 units. In 2015 IHS Automotive forecasts that BMW Group sales will rise by a very healthy 9.1% to 2.30 million units, thanks to further growth in China.
The reasoning behind BMW's future vehicle technology push is the forthcoming increasingly stringent EU vehicle emissions regulations which will reduce fleet-average CO2 emissions to 95g/km by 2021, with OEMs required to hit average emissions of 85–110 g/km for volume brands, and its mechanism is also already in place for the EU to introduce an even more stringent emissions target by 2025. Therefore OEMs like BMW will have to spend ever vaster sums on lowering range-average emissions in the current technology paradigm, or take the more radical route of completely rethinking the technology and engineering format of their vehicles. Given BMW's head start in the area of EVs and PHEVs with the i range and the high-end technology solutions already employed in these cars it makes sense to follow this radical route but it will be an expensive and time-consuming process to introduce these kind of technologies and new and radical hybrid powertrain formats across its mainstream models BMW's "big car" sales — not including the 1-Series and the Mini family — amount to about 75% of its output. This means getting the CO2 emissions of the mainstream 3-Series, 4-Series and 5-Series down to 50g/km (on the current test regime) or even lower.