Financial Data and Key Metrics Changes - The company reported a softening effect on pricing with a €300 million impact on EBIT from Q1 to later quarters, indicating that this effect will not be seen at the same level in subsequent quarters [4] - The average revenue per car remained stable at approximately €50,000, plus or minus foreign exchange fluctuations, reflecting disciplined pricing strategies across markets [9][52] - Financial Services business saw a total new contract volume of €15.6 billion, with growth in both new and used car segments by 20% to 22% [68] Business Line Data and Key Metrics Changes - Battery Electric Vehicle (BEV) sales in China grew by 18%, outpacing the overall market growth of 15%, indicating strong performance in the electric segment [17][48] - The company is focusing on refurbishing the oldest factory in Shenyang to increase production capacity and maintain market share in the BEV segment [16][17] Market Data and Key Metrics Changes - The company noted that 90% of BEVs sold in China are priced under RMB 300,000, which affects pricing strategies for models like the 3 Series and X3 [64] - The overall sales in China decreased by 4% in Q1, primarily due to the ramp-down of the 5 Series, but this is expected to improve as production ramps up [65] Company Strategy and Development Direction - The company is committed to maintaining a competitive edge by avoiding import tariffs on Chinese products, emphasizing the mutual dependencies in the supply chain [12][36] - The long-term strategy includes increasing the share of BEVs to comply with upcoming CO2 regulations, with a target of a 15% reduction in fleet emissions by 2025 [11][43] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about the potential introduction of import tariffs, arguing that it could jeopardize the competitive advantage of global players like BMW [10][12] - The company remains optimistic about maintaining EBIT margins within the strategic corridor of over 8%, despite challenges in the market [49][74] Other Important Information - The company is investing in high-voltage battery production facilities across multiple countries, including Germany, Hungary, China, the United States, and Mexico, to enhance in-house capabilities [40] - The management highlighted the importance of technology openness and the need for a balanced approach to PHEVs and BEVs to meet customer demands [56][44] Q&A Session Summary Question: Pricing and EBIT bridge - The management acknowledged that Q1 was exceptional and that pricing pressures are expected to ease in the coming quarters, with a focus on maintaining stable pricing levels [9][67] Question: Investments in Shenyang - Management confirmed that investments in Shenyang are aimed at refurbishing the oldest factory to increase production capacity and support BEV growth [16][17] Question: Competitors' insourcing strategies - The company is not currently pursuing significant insourcing but is maintaining a stable sourcing environment with multiple suppliers [18] Question: CO2 legislation and market competitiveness - Management emphasized the need for gradual CO2 reduction policies and the importance of maintaining competitiveness in the automotive industry [43][45] Question: Future margin expectations - The management expressed confidence in maintaining EBIT margins in the upper half of the full-year range, despite potential cost pressures [74]
BMW(BMWYY) - 2024 Q1 - Earnings Call Transcript