Report on BMW Group of Companies

INTRODUCTION

The BMW Group of companies is a German-based company founded in 1916. The initials BMW is a German term meaning Bayerische Motoren Werke AG. It mainly manufactures both luxury motor vehicles and also motor cycles. The company’s headquarters is based in Munich, Bavaria, in German.

The BMW company started as an aircraft engine manufacturer from early 1917 to 1918. The manufacture of aircraft engines in the early 1910s was greatly contributed by world war 1. As the war progressed over time, the use of new modern warfare was important in winning and ensuring that enemies were kept at bay. Therefore, BMW resorted to manufacturing aircraft engines mainly to manufacture fighter aircraft used in the war.

The manufacture of aircraft engines also came back online between 1933 to 1945. During the Cold War, the world was anticipating the second world war. The company, therefore, started manufacturing the aircraft engines again for the use in the manufacture of the aircraft to be used in the world war.

Since then, the company has been manufacturing automobile and motorcycles. The automobiles are manufactured and sold under the brand names BMW, Mini, and Rolls-Royce. On the other hand, motorcycles are being marketed and sold by the brand name BMW Motored.

The company is well known for its participation in sports in the manufacture of vehicles used in sports racing. Some sports include the Formula 1 race, which it just concluded in the previous year. Other cars produced under the BMW label include touring cars, sports cars, and the Isle of Man TT.

History of BMW

The company’s main headquarters is based in Munich, which serves the better part of Europe. The company also has its mini-headquarters in almost all the seven continents, that is, brazil, china, Mexico, Netherlands, South Africa. The headquarters act as intermediaries for the respective countries and their continents.

It was after the first world war that the company started producing motorcycles. The company produced motorcycles, but it also produced farm equipment, household items, and railway breaks. It was not until 1928 that BMW started producing automobiles under the license of Dixi Marque. It then followed and produced different cars, from sports cars to luxury cars.

The company continued producing automobiles, motorcycles, and other equipment until the second world war when it started concentrating more on aircraft engines again. In the process, many of its factories were bombed, and they suffered greatly. Therefore, it resorted to producing household equipment to survive in the time.

Aims and Objectives of the report

The report’s main objectives are to assess the origin, growth, and future of the BMW Group of companies. At the moment, the BMW Group of companies is 105 years old since its formation in 1916. Over the years, major transitions have been significant in its growth, not forgetting the downtimes that cannot be evaded in any business.

The report will also assess the company’s growth in terms of its financial status. The profitability status for the last few years will be assessed, and information obtained will be used to conclude its current financial situation and the future of its engagements.

There have been sponsorship and joint association with other industries and competitors in solving current world problems or in making the success of certain events, especially in sports. We can hear about BMW in sports, the art industry, and the film-making industry. The new developments by the company are also important to mention.

Financial performance

The profit and loss statement

Over the years, there has been a significant rise in the profitability of the BMW Group of companies. The mergers and acquisitions by the company have been of great help in trying to reduce competition between the company and its main competitors, the Toyota Company. There is a standard already set by the company, and its quality makes the company note prone to effects of competition by other car companies.

The table below shows the profit and loss statements for the period 2011 to 2019.

From the tables above, it is evident that there has been a steady growth in the company’s revenue from the year 2011 to the year 2019. The increase in the revenues also causes a rise in the company’s net income. As of the year 2019, the company’s revenues and net income as at year-end were 104.210 billion euros and 4.915 billion euros, respectively.

The rise in revenues and net income over the span of nine years has been caused by the introduction of new car models to the more affordable consumers, increasing sales, which translates to the company’s net profits. In addition, over the years, there has been an increase in the level of livelihoods, and therefore more people tend to afford vehicles over time.

From the table above, growth in the company can be seen. The growth can be measured in terms of the employees the company employees. Over the nine years in the table above, the number of employees has risen by almost a third; that is, in the year 2011, it was 100306, and in the year 2019, the total employees had risen to 133,778.

The sales of the respective production items are shown in the table below.

From the table above, the sales of BMW automobiles rose by almost half from 1380384 in 2011 to 2185793 in the year 2019. The mini brand also saw an increase from the year 2011 to 2019. The Rolls-Royse brand sales also rose from 3538 in 2011 to 5100 in 2019. There has been a rise in the sales of motorcycles too from 2011 to 2019.

The statement of financial position

The total assets of the BMW Group of companies have been on the rise over the past nine years. The increase in the assets is brought about by the additional investment in its production and the production centers to accommodate the increasing demand for its vehicles.

The table below shows the total assets for the year between 2011 and 2019.

From the table above, the assets increased by almost half from 12.429 billion euros in 2011 to 241.663 billion euros in 2019. The rise in the assets is a good indicator that the company is operating on a going concern basis; that is, the company will exist into the future since it can finance itself without running bankrupt.

Conclusion

From the finding and the information available from the research, we can therefore conclude the general performance of the BMW Group of companies. The company, over the years, has grown extensively, as evidenced by the growth in the number of employees employed by the company. We can therefore conclude that the company is growing at a positive rate.

The company also employs good marketing strategies, as evidenced by the increase in the sales of its products. Between 2011 to 2019, there has been an increase in sales, imploring the management’s effective marketing and selling strategies.

In general, the company’s performance is positive and attracts better investment. The current share prices of the company are now at a high of 77, showing that the company is performing well in all areas of practice.

References

Pozo Cardenal, A., & Carrió Garcia, F. (2013). Qualitative and quantitative financial analysis of BMW GROUP.

Viippola, A. S. COMPARATIVE FINANCIAL STATEMENT ANALYSIS OF CAR MANUFACTURING COMPANIES BASED ON VOLKSWAGEN GROUP AND BMW GROUP DURING YEARS.