BMW expects profitable growth in 2024 driven by new launches

Strong products, robust demand, better results: Taking a lead from seeing healthy sales during 2023, which saw the automotive segment report its highest-ever operating result, the BMW Group aims to continue on its profitable growth course in the current financial year, said a company statement.  

As per BMW, in the automotive segment, owing to a slight increase in demand, full availability of new models and the upcoming model launches, deliveries of BMW, MINI and Rolls-Royce vehicles are projected to be slightly higher than the previous year. 

The completely-electric vehicles’ share of deliveries is forecast to increase significantly, compared to 2023. The EBIT margin in the Automotive Segment should be within the range of 8-10 per cent in 2024.

As per BMW, fully-electric vehicles (BEVs) and models from the upper premium segment are to remain the main growth drivers again in 2024. These include the BMW 7 Series models, the BMW X7 and the Rolls-Royce model family, with the fully-electric Rolls-Royce Spectre.

“In both segments, the BMW Group expects to see significant double-digit growth in the current financial year. In addition, the BMW 5 Series models, including the BMW i5, which will also be available for the first time as a fully-electric Touring model this year, plus vehicles from BMW M GmbH, will contribute as well,” said the statement. 

Positive outlook 

Overall, the BMW Group expects to see a slight increase in deliveries in the automotive segment in 2024.  “The more challenging the framework conditions become, the more important it is to implement a consistent strategy. As a result, strong products and a high degree of responsiveness will remain our key success factors in 2024. This will continue to make us a reliable partner for customers, investors and stakeholders in the future,” said Oliver Zipse, Chairman of the Board of Management of BMW AG, on Thursday.

R&D spending and capital expenditure to peak 

The company will maintain its strategic course, as planned, in 2024, with extensive investment in its plants, its range of premium vehicles and innovative technologies. This is seen in the construction of the plant in Debrecen (Hungary) and high-voltage battery assembly facilities in Shenyang (China), Woodruff (USA), San Luis Potosì (Mexico) and Irlbach-Straßkirchen (Lower Bavaria). With extensive expansion at Plant Munich and electrification of the MINI plant in Oxford, capital expenditure is set to peak in 2024. Digitalisation of the company and its products also necessitate higher spending.

In addition to capital expenditure, R&D spending will also reach a new high this year. This will mainly be focused on electrification of the vehicle portfolio, including the products of the NEUE KLASSE, as well as in-car digital innovations, such as connectivity, software stacks and automated driving.

“We are investing in the future of our company like never before. Construction and modernisation of our plants and the planned expansion of our portfolio are progressing quickly this year. Our capital expenditure and R&D spending will reach new levels. We are expecting a capex ratio above 6 per cent and an R&D ratio above 5 per cent,” Zipse said. 

 The company is also aiming to achieve an Automotive EBIT margin of 8-10 per cent for the current financial year. This includes the continued dampening effect of depreciation and amortisation for BBA assets from the purchase price allocation.

“Our technology clusters give us important leverage for fast and efficient scaling of innovations and technological advances. In this way, we are able to ensure that we offer our customers the latest technology – regardless of the segment and the vehicle’s powertrain,” said Zipse.

BMW new India launch 

BMW India on Wednesday launched the new all-electric BMW iX xDrive50 in India. The new BMW iX xDrive50 is available at all BMW dealerships across India as a Completely Built-Up Unit (CBU) model from today onwards.

Vikram Pawah, President, BMW Group India said the BMW iX is the highest selling electric luxury vehicle in India and significantly drives BMW Group Indias number one position in the luxury electric segment.  Now, with the introduction of the new BMW iX xDrive50, the car will not only impress, but also take your drive to new electric heights, he said.