German automaker Bayerische Motoren Werke AG (BAMXY) finished 2015 on a high note. The company remains firmly on top of the luxury car market, experiencing record sales in several markets. Overall, BMW has managed a strong portfolio of brands, reaping the profits of the portfolio in recent years. The company has been making a concerted push into emerging markets such as India and China. As the economies have improved, more and more people have purchased luxury cars, with BMW sitting at the forefront of the market. However, with China’s economy creeping to a halt, BMW has already seen uncertainty in financial markets directly affecting sales. With other automakers gunning for the top spot in sales and BMW’s line of cars becoming slightly dated, 2016 could prove to be a decidedly more challenging year for the company.
BMW’s Situation
BMW has been at the top of the luxury game for some time. The company became the leading distributor in 2010, and has remained ahead of competitors ever since. In the third quarter of 2015, the company recorded a fantastic 14.00% gain in revenues year over year while profits also rose by an impressive 12.80%. For the year, two of the company’s three brands saw healthy improvements, with Mini and BMW cars raising sales by 6.10% while the motorcycle division increased top line results by a remarkable 11.00%. The only blemish for the year came with Rolls Royce, which saw a five-year streak of sales growth end in China after overall global sales fell by -6.80%.
BMW has proven to be resilient, maintaining a strong position in the industry since 2009, bucking the trend of most luxury automakers and managing to keep sales consistent throughout. Recently, the company has benefited from a general expansion into emerging markets. The company has made a concerted effort to break into India, mostly through its motorcycle segment. BMW is planning on offering two new motorcycles designed especially for the country, and priced much lower than their existing lines. The plan could prove profitable, as India’s premium motorcycle industry has proven to be a major growth proposition, with sales for the second quarter of 2015 up by 39.00% for bikes at or above 200cc. BMW stands to gain big, despite some challenges in the local market.
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