Financial Data and Key Metrics Changes - The average transaction price for BMW's vehicles in Q1 2024 was €53,000, while the full-year average for 2023 was approximately €51,000, indicating stability in pricing year-to-date [4][5] - The company expects pricing across its portfolio in 2024 to remain on par with the previous year's levels [4] Business Line Data and Key Metrics Changes - The company reported a normalization in used car pricing, which peaked in Q1 2023 and has been gradually declining since then [5] - In China, BMW's market share in the segment priced above RMB 500,000 (approximately €65,000) is 5%, with a year-on-year volume increase of 3% for models X57 and X7 despite a 5% decline in the overall market [6] Market Data and Key Metrics Changes - In the U.S., BMW's days of supply at dealerships is 31 days, compared to the industry average of 55 days, indicating less pricing pressure on BMW [8] - The company noted a positive trend in transaction prices in China, with a stabilization observed in July [6] Company Strategy and Development Direction - BMW is focused on reducing CO2 emissions and plans to introduce a new vehicle class (Neue Klasse) in 2025 to meet future targets [12][13] - The company aims for a 15% reduction in average fleet emissions by 2025 and a 55% reduction by 2030 [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining stable pricing and volume growth, particularly in Europe and China, despite market challenges [14][15] - The company is adjusting production strategies in response to market conditions, particularly in China, to stabilize transaction prices [44] Other Important Information - BMW is working on its Corporate Sustainability Reporting Directive (CSRD) and expects administrative costs but does not foresee significant financial impacts from this work [31][32] Q&A Session Summary Question: Pricing developments in the second half - Management indicated that pricing across the portfolio is expected to remain stable, with some normalization in used car prices impacting revenue [4][20] Question: Volume, mix, and pricing expectations for 2024 - Management expects a neutral impact from volume, mix, and pricing, supported by strong order intake and product availability [14][15] Question: Challenges in energy transition - Management emphasized the importance of aligning product offerings with market demand and infrastructure, noting a significant increase in BEV sales [26][27] Question: CO2 emission targets and combustion engine strategy - Management clarified that they are not pushing back on CO2 reduction but advocating for a technology-neutral approach to achieve emissions targets [29][30] Question: Financial impacts of CSRD - Management confirmed that all relevant issues identified in the CSRD will be reflected in the financial statements, ensuring transparency for investors [31][32] Question: Profit before tax and automotive margin expectations - Management indicated a slight contraction in profit before tax is expected, with a focus on maintaining margins within the lower end of the target range [36][37] Question: Production versus retail sales ratio - Management acknowledged overproduction but expressed confidence in adjusting production schedules to align with market demand [39][42] Question: Volume trends in China - Management noted a potential improvement in volume trends in China, supported by the full availability of the 5 Series and MINI models [44]
BMW(BMWYY) - 2024 Q2 - Earnings Call Transcript