Dubai: Coming off its best first-quarter showing ever, the BMW Group can put on the cruise control. With all of the key indicators in positive territory, the group maintains that the growth pattern will hold and place it on course for a record performance for the full year.
While it's true that the global automotive industry has reversed its recent decline, and in some cases spectacularly so, there is still a slew of factors — the recent strength of the euro among them — outside its direct control and which could act as speed-breakers in the medium term.
But Graeme Grieve, vice-president for importer markets at BMW Group, explains at length why the German automaker does not necessarily buy into that view.
GULF NEWS: Isn't it likely this year could set a pattern of uneven growth for the BMW Group?
GRAEME GRIEVE: 2010 was a great year for BMW Group on a global and Middle East level, and the first quarter of 2011 has been no different. Here in the Middle East, we ended 2010 with an 18 per cent sales increase — we sold the highest number of vehicles since the company commenced regional operations in 1994.
And the first quarter of 2011 has shown continued growth with our sales increasing 19 per cent. These results lay a very positive path for the remainder of the year and although we are still operating in volatile and challenging market conditions, we are aiming to end this year with strong growth.
Any concerns that the wider Middle East situation might hit your prospects in the second half?
We are monitoring the situation closely and hope the current conflicts subside, and peace and economic stability are restored in these countries very soon.
In terms of sales, is BMW being driven by strong growth on the 7 and 5 Series and less so for the others?
The Middle East market shows a strong preference for larger models, and historically our flagship 7 Series model has been either our bestseller or one of the top three bestselling models.
However, it is not only our 7 Series that drives our sales growth, our X sports activity vehicles and the 5 and 3 Series are also among our top selling models.
With the euro's recent strength, are we going to see showroom prices taking a hike? Or would you hold back given consumer sentiments are still shaky?
Our importers are invoiced in euros, so when it weakens, it's positive and they pay less for each vehicle. And when it strengthens, it's negative as it means they pay relatively more.
However, it wouldn't make business sense for us to fluctuate the price of our vehicles too frequently as we need to maintain price consistency and ensure we protect the resale value of our customer's cars.
Quarterly or half-yearly, our importers will assess the effect the exchange rate has had over a few months of business and decide if and how to alter the prices of the vehicles fairly.
But we always maintain a steady pricing of our vehicles to protect the customer's resale value.
There were concerns that automobile component supplies would be disrupted given the Japan situation. Are you looking to reduce dependence on Japan for parts supplies for the near term?
We have very few direct suppliers in Japan. We are still analysing the situation of our sub-suppliers — but so far our production is not affected by the disaster in Japan.
The brand had a good first-quarter in the US. But do you believe the run can be sustained?
This year got off to an excellent start for the group with new sales records.
This is mainly thanks to our model range and healthy auto markets in many parts of the world — in Europe and the US and in the emerging markets of South America and Asia.
While we accept consumer confidence will play a big part in our prospects, we are confident our expanding range of models will allow us to continue this growth.
We are targeting record Group sales of over 1.5 million vehicles for 2011.
Revenues up nearly 30%
For the first three months of the year, BMW Group revenues were up nearly 30 per cent to 16.03 billion, helped by all of its three marques — Mini and Rolls-Royce the other two — setting new sales records.
The number of BMW, Mini and Rolls-Royce brand cars sold were up 21.3 per cent to 382,758 units for the best first-quarter sales volume performance in the Group's history.
BMW branded models recorded growth of 20.8 per cent to 321,175 units, led by the doubling of volumes of the 5 Series to 85,423 units.
"We are aiming for a record sales volume of well over 1.5 million vehicles as well as new full-year sales volume records for each of our premium brands BMW, Mini and Rolls-Royce," said BMW AG chairman Norbert Reithofer.