BMW Targets Brazil, Russia, Turkey, S. Korea for Two Factories
Bayerische Motoren Werke AG (BMW), the world’s largest maker of luxury vehicles, is considering adding two auto factories in emerging markets as it seeks to extend its lead over Volkswagen AG (VOW)’s Audi.
BMW is evaluating sites for a plant in Brazil as well as another factory in Russia, India, South Korea or Turkey, Chief Executive Officer Norbert Reithofer said today at the company’s annual shareholders’ meeting in Munich.
“The people in these countries want more individual mobility,” Reithofer said in a speech. “We want to further our lead in the premium sector.”
The maker of BMW, Mini and Rolls-Royce cars is expanding in emerging markets as it looks to guard its independence and fend off Audi, which aims to overtake BMW as the luxury-car leader by 2015. BMW’s joint venture plant in Shenyang, China, is boosting investment to 1 billion euros ($1.42 billion) from 560 million euros.
BMW will pay a record profit-sharing bonus to its employees this year based on 2010 results. Employees paid under collective-bargaining agreements will receive an average of 5,840 euros, the equivalent of 1.6 times monthly wages. The company confirmed its goal of increasing profit this year and selling more than 1.5 million vehicles. BMW aims to hire 2,000 people this year to support its expansion, Reithofer said today.
BMW is proposing a dividend of 1.30 euros per share after 2010 net income surged to 3.23 billion euros from 210 million euros a year earlier. The investor payout is a record for the company, Reithofer said today.
The German carmaker earned more money per car than ever in its 95-year history in the first quarter, because of surging deliveries of the revamped 5-Series sedan and lower spending on supplies. BMW made a profit of 4,462 euros per car on average, compared with 4,145 euros at Daimler AG (DAI)’s Mercedes-Benz and 2,981 euros at Volkswagen’s Audi.
Sales of BMW’s 5-Series more than doubled to 85,400 vehicles in the first quarter, fuelling a 21 percent advance in total sales to 382,800 autos. BMW said May 4 it expects to sell a “well over” 1.5 million vehicles this year, a record, surpassing the 2010 level of 1.46 million.
China’s growing economy and a rebound in spending in the U.S. are driving record demand for vehicles from the three German luxury-car makers. VW reported first-quarter earnings before interest and taxes more than tripled because of demand for Audi in China. Daimler’s operating profit rose 71 percent, led by sales of the Mercedes S-Class.
Audi’s operating profit was 10.6 percent of sales in the first quarter, compared with 9.3 percent for Daimler AG’s Mercedes and 11.9 percent for BMW’s automotive division.
BMW is expanding its lineup to reach a goal of selling more than 2 million cars and SUVs annually by 2020. It has created the “i” electric-car sub-brand, which will start in 2013 with the i3, a battery-powered city car. BMW is also planning the i8, a hybrid supercar based on the Vision Efficient Dynamics prototype. The sub-brand’s models will have frames built largely of carbon fiber and display a blue ring around the BMW logo.
The company is developing front-wheel drive models for the BMW brand and plans to expand the Mini line with a coupe and roadster. The manufacturer is also pushing into transport- related services and experimenting with short-term rentals as it seeks to appeal to consumers more interested in gadgets such as Apple Inc. (AAPL)’s iPhone. The company started a $100 million venture- capital unit and invested in the MyCityWay guide service.
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