BMW Business Will Be Sustainable for Decades: Meyer

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July 8 (Bloomberg) –- SEB Investment Management Portfolio Manager Juergen Meyer previews BMW’s sales figures and discusses why he says BMW’s business is sustainable for decades to come. He speaks to Anna Edwards and Ryan Chilcote on Bloomberg Television’s “Countdown.” (Source: Bloomberg)

I just took a look at the stock, it is up 10% this year.

I know your big thesis is that this is the stock to own because it outperforms everything under the sun.

So, give it to us.

It probably won't outperform everything under the sun, but bmw owns a very profitable and sustainable business.

If you look at a bmw chart for the past few decades, you will realize that it typically performs with more than 10% plus per annum on average.

I think these past performances are sustainable for the decades to come as well.

Nothing has changed in bmws business.

It is a market leader in premium cars.

Those are effective barriers against entry from competitors.

Let me ask you about that.

Obviously, i get the fact that it is complicated to go from not making luxury cars to making luxury cars.

There are a lot of midmarket carmakers out there that are starting to add some of the bells and whistles that bmws have.

I am thinking about vw with its facade.

Passat.

They're coming out with this function with the new card were you can see road information right on the window in front of you.

That is a editor to bmw, no?

Maybe not the passat, but maybe audi which is owned by volkswagen.

My guess is there are five companies in the world that -- this is toyota and volkswagen and mercedes and bmw.

Even if you have this technology, you cannot easily conquer clients of bmw or mercedes, because you lack the image.

If you look at the motivation of somebody who is willing and able to spend 50,000 euros on a car, he probably won't opt for a fapassat.

Even if volkswagen can offer that in their car, the take rate will be much lower than bmw or audi.

At what shoul rate our buyers going from the general car market into the luxury sector?

How fast is a growing compared to the rest of the car industry at the moment?

In the past decade, the share of the premium manufacturers in car markets grew steadily, outperforming the no image producers.

I think the trend is persistent.

One reason is that relative to our earnings, cars are getting cheaper and cheaper.

More and more people get in the position where they do not have to buy the cheapest offer, but something they like, something with a solid image.

Word you see that trend as being vulnerable?

Where is that?

In the united states?

Is it in parts of asia if we see currencies depreciate?

Where do you see any vulnerability to that bullish case for the lecture economy or his?

-- economy car makers?

We have relatively high fluctuations in sales.

Bmw and mercedes are both global brands.

They can easily -- their fluctuations are smaller than those that are limited from single markets.

The main risk to these premium car many factors would be that somebody will invent -- we

This text has been automatically generated. It may not be 100% accurate.

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