BMW Profits Nose Dive As Automaker Shifts To A Technology Based Product Line Up

BMW AG reported its weakest profitability since 2010, capping a negative year for Chief Executive Officer Harald Krueger after the brand lost the industry sales crown to arch-rival Mercedes-Benz.

Amid higher spending on next-generation technologies, BMW's automotive profit margin fell to 8.9 percent in 2016 from 9.2 percent a year ago, according to a statement on Thursday. Groupwide earnings before interest and taxes dropped to $9.92 billion (9.39 billion euros), missing the average analyst estimate of 9.82 billion euros, according to data compiled by Bloomberg. The shares fell as much as 4.2 percent, the most in four months.

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PUGPROUD - 3/9/2017 10:45:06 AM

+1 Boost

Somebody please tell Munich that its a car stupid.

Dexter1 - 3/9/2017 11:38:59 AM

0 Boost

BMW profits took a nose dive because the shit they've been coming out with doesn't compare to MB. Think about it: Audi has loads of tech in their product line up, and they aren't seeing their profits or sales decline. BMW needs to stop kidding themselves and start resurrecting their Ultimate Driving Machine status instead of paying lip service to it.

malba2367 - 3/9/2017 12:56:27 PM

+1 Boost

BMW is going to have to merge or form a close joint venture with a larger automaker at some point (Toyota makes the most sense), they don't have the resources or scale to compete in the rapidly changing car market. Audi, while it has some short term financial issues related to the diesel scandal has huge resources. Mercedes has the best brand of the german three, and interests in many other businesses in addition to their joint venture with Nissan/Renault

The move towards "tech" instead of "driving dynamics" is a smart business decision (which enthusiasts may not appreciate) because the vast majority of millennials are more interested in tech than the pleasure of driving.

JRobUSC - 3/9/2017 4:20:44 PM

+2 Boost

hmm, BMW's actual press release says the exact opposite:

http://f30.bimmerpost.com/forums/showthread.php?t=1361987

GermanNut - 3/10/2017 9:21:32 PM

+4 Boost

Hmm...isn't it surprising that BMW issues a press release that tries to make itself look good?

It's clear BMW is in a bad situation. It's U.S. sales growth and global sales growth is a fraction of Mercedes-Benz's. That much slower pace of growth cost BMW the U.S. and global sales titles in 2016.

BMW is paying a severe price for shifting from its slogan of Ultimate Driving Machine while trying to remain independent and compete with companies such as Mercedes-Benz Audi on hugely capital intensive projects such as automation, self-driving cars and other next-generation technology like artificial intelligence.

The writing is on the wall for BMW. Either shift back to the Ultimate Driving Machine or be forced to merge with a rival that has more resources to bring those next-generation technologies to market.

MDarringer - 3/9/2017 8:31:11 PM

-2 Boost

BMW is admitting defeat.

85bmw745i - 3/10/2017 10:42:53 AM

+2 Boost

BMW need to go back to making drivers cars with steering feedback and brake pedal feel and overall sense of being connected to the road like they used to. ditch the turbo engines on the M cars and put some bespoke, high reving N/A engines that made the M division famous. Don't get me wrong, I love the straight line acceleration of a turbo engine and the low end diesel like torque, but winding an engine up like the previous V-10 is just so much more fun, and the sound of a high strung N/A inline 6 is just beautiful. Cadillac is making what BMW should be making in terms of a drivers car, and thats sad, because 10 years ago you couldn't have ever convinced me that Cadillac would ever build a car on BMW's level, or any German car makers level.

supermoto - 3/10/2017 1:50:46 PM

+2 Boost

So much for "the ultimate driving machine." Sad!