Tag Archive | "BMW"

BMW Recovery: Some Are Optimistic, but Many Remain Skeptical

FRANKFURT – BMW AG has forecast a modest rise in car sales this year and confirmed it expected a 2009 pretax profit despite the global economic crisis, Reuters reported.

While some analysts welcome the sales figures for 2009 and see upside to the company’s targets, others expect continuing pressure on the company’s profit margins and outlook as the car sector remains vulnerable due to the global economic crisis.

“Revenues have surprised positively. We see our positive case for BMW confirmed,” Equinet analyst Tim Schuldt wrote, keeping a “buy” rating on the stock.

BMW said its 2009 sales came in at 50.68 billion euros ($71.15 billion), exceeding the DZ Bank estimate of 48.35 billion euros.

Analysts at Citigroup also keep a “buy” rating on BMW. They argued that the launch of the new 5-series medium-premium sedan in 2010 could add positive momentum to the current consensus for revenue growth of 5 percent.

DZ Bank analyst Michael Punzet remains skeptical on the company despite revenue coming in above his expectations, keeping a “sell” rating on the stock.

“Without any more details, especially on sales and earnings division break down we see no reason to change our skeptical view on premium manufacturers and therefore confirm our sell recommendation on BMW,” Punzet wrote.

Analysts at Exane BNP Paribas also remain cautious on the stock, hiking their price target but sticking to their “underperform” rating.

“We remain skeptical about the aggressive 2012 group margin target,” the Exane analysts wrote.

BMW aims to achieve an earnings before interest and taxes (EBIT) margin of 8 percent to 10 percent in the automobile segment by 2012.

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BMW Boosts Warranty on Certified 2007 Models

BMW of North America is upping the ante on its no-cost maintenance plan, adding an additional two years or 50,000 miles on select certified pre-owned 2007 models sold between Feb. 2 and March 31, reported Automotive News.

The upgrade is activated when a new-car transferable four-year or 50,000-mile warranty expires. BMW customers with certified pre-owned 2007 3 Series, 5 Series and 7 Series are eligible to receive the no-cost maintenance plan upgrade that ups the warranty to six years or 100,000 miles.

“That’s the bread and butter, the heart of our lineup,” Russ Lucas, manager of BMW Pre-Owned Sales, told Automotive News. “They represent 45 percent of our sales. In the next 60 to 90 days, I think we’ll see more sold.”

The plan covers all service inspections, oil service, wiper blades, and normal wear and tear, like oxygen sensors and brake and clutch replacements. BMW estimates that costs for those services could amount to $1,800 over two years without a maintenance plan. The deal is conditional upon standard BMW Financial Services rates.

“The intent is to attract additional customers to BMW’s used car business who still have reservations about the reliability and overall value of certified pre-owned cars,” BMW said in a statement.

Last year, BMW’s certified pre-owned sales rose 9.5 percent to 114,423. The increase was a new record year for the program.

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Volkswagen to Add Eight Audi Models to Challenge BMW

Volkswagen AG’s Audi brand aims to add eight models by 2015, challenging BMW AG as the world’s largest maker of luxury cars, reported Bloomberg.com.

Audi will invest 7.3 billion euros ($10.5 billion) on new models and plant upgrades through 2012, the Ingolstadt, Germany-based automaker said in a statement. Spending on new models will total about 5.9 billion euros, or 81 percent of the budget for the four-year period that includes 2009.

The investment is part of Wolfsburg, Germany-based Volkswagen’s plans to spend 25.8 billion euros between 2010 and 2012 as it seeks to become the world’s dominant automaker. Audi, which ranks third behind BMW and Daimler AG’s Mercedes-Benz brand, will increase its lineup of cars and sport-utility vehicles to 42 models by 2015 from 34 now, it said.

Audi’s new vehicles will include the A1 compact, which is due to be introduced in mid-2010. As BMW develops a line of small urban vehicles and Mercedes-Benz prepares to invest 1.4 billion euros to expand its small-car lineup, the A1 will become Audi’s lowest-priced model, spokesman Armin Goetz said in a telephone interview today.

The VW division will also introduce the A7, a large luxury-coupe that will compete with BMW’s 6-Series and Mercedes-Benz’s CLS. By the end of 2010, Audi will start selling a hybrid-version Q5 SUV, its first vehicle that combines an electric motor with a conventional engine. Audi will start producing the E-tron electric-powered sports car by the end of 2012.

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