Currently reading: BMW: profits are more important than car sales
Sales and marketing boss Ian Robertson isn't concerned by the growing sales of rival car brands
Jim Holder
News
2 mins read
11 May 2016

Profits will always be more important than being the world’s biggest premium car maker for BMW, according to sales and marketing boss Ian Robertson, after the firm slipped from first to third in the sales race against Mercedes and Audi in the opening months of 2016.

In particular, Mercedes sales have surged, rising up to 20% year-on-year off the back of strong demand in China. BMW’s growth rate, meanwhile, has exceeded that of Audi, but the latter is still selling more cars.

“Profits have always been our guiding light, and our consistency in that field bears testament to that,” said Robertson. “But within that, there is always the challenge of balancing the equation between profit, volume and residual values. If I’m honest we’re not 100% where we want to be.

“But a lot of that is down to some clear, profit-led decisions we’ve taken. In Russia, where the currency has halved in value, we’ve stopped selling our smaller cars. That’s a profit decision that some of our rivals haven’t taken. Likewise, we are more active in some European fleet markets than others.

“The appeal of volume is that it is a multiplier of other savings - if you have volume you can use it to drive profits in other ways. But it can also risk profits. We have a team of people monitoring it, and it is not an easy equation, but profits must always guide our decisions.”

Robertson also highlighted the importance of residual values in setting lease rates and cautioned that over-aggressive discounting would have a long-term negative impact on that, eventually driving the lease rates up again.

“Premium brands do have an inherent advantage in being more desirable,” he said. “I’m not in a position to talk about the strategy of our rivals, but I do know that I am happy with where our residual value predictions are, and you do have to balance out volume gains against long-term knock-on effects.”

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gingerdog 18 May 2016

"Profits are more important than car sales"

Perhaps that should read 'profits are more important than car manufacturing'.
rdsreference 12 May 2016

Wolos

Surely people aren't nieve enough to believe that article. What a load of sh... Maybe the premium brands should not be called premium anymore. 3 series c class and A4 seriously mass produced along with cars from next segment also.These cars are not special like they used to be. They all offer discounts, do they care about the end user you and me? Certainly not. Car manufacturers are interested in profit but they also want numbers. Basically they want everything and in the end its the dealer who has to put up with all their shit rules and moving the goalposts mid season.
Gerhard 11 May 2016

Robertson and BMW have

Robertson and BMW have finally seen the light and are reverting to the more 'premium' path of margins over volume, something essential to avoid flooding the market and damaging the brand image. It's about time. Let VW chase volume with its Audi brand and let Mercedes expand ever further downwards with Renault/Nissan parts. BMW needs to retain its cachet and seek quality over volume economics.

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