Bayerische Motoren Werke AG (BMW) produces vehicles under the BMW; MINI, and Rolls-Royce brands.

After a dance with bankruptcy at the turn of the '60s, the company's image is today as premium as in its prewar years, yet - paradoxically enough - more massively so by dint of exposure to a larger audience.

BMW is also among the most profitable of automakers. Its profit rose 28% to a record high in 2006, while net income rose to �2.87 billion ($3.8 billion) from �2.24 billion.

BMW has boosted vehicle sales by more than 50% since 2000, while largely retaining its workforce. It is the company's aim to boost productivity by 5% per year.

BMW-brand sales rose 5.2% to 1.19 million vehicles in 2006 (maintaining a lead over Mercedes-Benz), while sales of the MINI declined 6.2% to 188,072 cars and the Rolls-Royce division shifted 805 cars (an increase of 1.1%).

The BMW Group, as a whole, expects to sell more than 1.4 million vehicles in 2007.


Since 2007, BMW has had a gasoline engine alliance with PSA Peugeot/ Citroen. The alliance builds, for the MINI; Peugeot 207; Peugeot 308, and Citroen C3 Picasso, a family of 1.6-liter turbocharged engines with fully variable valve timing and direct fuel injection. Power outputs range from 75 to 175 horsepower. One of these engines was dubbed best-in-class at the 2008 International Engine of the Year Awards.

A revised agreement was signed in February 2010.

In July 2008, BMW signed a memorandum of understanding with the Fiat Group, by which future generations of MINI models may share platforms and components with Alfas. Signed by BMW AG's Friedrich Eichner and the Fiat Group's Alfredo Altavilla, the memorandum points to BMW potentially helping Alfa re-launch in the United States.


BMW sales increase to 714,300 in 2007, over 686.800 in 2006.


The BMW Group's operating margin hits nearly 11% in 2000, and begins steadily declining, despite an average revenue by 2007 of around $50,000 per car.

While BMW sales have increased with the introduction of cars such as the 1 series and the MINI, reaching downmarket has also placed a damper on profits. It is, also, quite a shock when in August 2007, Autodata estimates BMW incentives at $4,258 per car, versus Ford at $3,802; GM at $2,899, and Mercedes-Benz at $2,692.

"We estimate that BMW's margins in the U.S. were close to 20% in 2001, when the dollar's weakness began," says Morgan Stanley's Adam Jonas.

"In 2007, they have sunk to between 2 and 5%.

"That's a huge fall, and implies that the company must be doing very, very well outside of the U.S." ('BMW expected to meet targets, despite U.S. problems,' Neil Winton, The Detroit News, October 9^th, 2007).

The U.S. market accounts for roughly 25% of BMW Group sales, and BMW profits have been hit hard by the falling dollar against the euro, prompting some investors to say that the company needs to open a second plant in the U.S. in addition to its Spartanburg, S.C. factory.

BMW is believed to have given the go-ahead for Spartanburg production to rise to 240,000 by 2012. The plant produced 104,600 vehicles in 2006, down from 124,800 in 2005, of a capacity of 160,000.

After a three-year drop in its margins, BMW's CEO Norbert Reithofer at the 2007 Frankfurt International Motor Show lays out plans to wring out $8.4 billion in savings by 2012, partly by cutting purchasing costs. With BMW's operating profit margin having fallen to 6.8% in the second quarter of 2007 from 8.3% a year earlier, Reithofer wants to see an 8-to-10% operating margin by 2012.

Reithofer also plans to accelerate sales by more than 40% by 2020. New models will include the X1 (a 1-series-based crossover/ SUV), and a 4-door sedan to rival Porsche's Panamera; Audi's A7 coupé, and Aston Martin's Rapide. MINI is expected to unveil a crossover/ SUV in addition to the 2008 Clubman, and Rolls-Royce is likely to add a Phantom coupé and at least one car smaller than the Phantom.


BMW has invested a considerable amount of money in developing hydrogen cars. In 2007, BMW NA lends the hydrogen-powered Hydrogen 7 to pre-approved (largely celebrity) customers for testing.

The company is not allowed to sell the Hydrogen 7, as it remains in development and has not been type approved.


MINI has fewer than 100 U.S. dealers.


BMW generally enjoys among the most prized profit margins in the industry, and a superlative sense of focus. Yet, like Porsche, it occasionally shows signs of being paranoid about its small size.

In the early-90s, then-CEO Dr. Bernd Pischetsrider concludes that buying Rover is the way to survive into the Millennium.

By 1999, the seams were starting to show; no sooner had we rung-in the Millennium, than BMW rid itself of Rover and (under Dr. Joachim Milberg) turned its attention toward launching MINI and Rolls-Royce, and stabilizing its own brand.

Then begin several years of a more polarizing BMW; a BMW which pushes its design language into various "bookends" for the purpose of authentically entering ever more segments previously alien to the BMW brand.

"We have to keep filling the niches," BMW CEO Dr. Helmut Panke tells author and analyst David Kiley (Driven, David Kiley, John Wiley & Sons, 2004).

Adds Autocar magazine, "recent history has proven that BMW's ability to identify; develop, and launch into new areas is becoming the company's core strength... some might say, at the expense of traditional BMW values given the unloved 7 series and compromise dynamic behavior of the Five" (Autocar, May 11^th, 2004).

In the same period, Volkswagen in America abandons its bread-and-butter products (the Golf and Jetta, in particular) to chase niche segments such as the ultra-luxury market (Phaeton). The result proves devastating to VW's U.S. sales and profitability.

BMW, on the other hand, is fundamentally changing the way it does things, beginning with its very guiding principle (an evolutionary approach to each new model). Believe the doomsayers, and the result could be similar to Volkswagen's even as the strategies for growth are quite different.

Might the growth of the brand into previously unfilled niches jeopardize its masterful understanding of what the public wants? Is BMW's superlative sense of focus at risk as the company moves into unknown territory? Does the company's unfamiliarity with segments such as compact crossover/ SUVs (X3) affect the precision of that focus?


At Detroit 1999, coincidentally amid one of the worst winter storms the Motor City has seen in decades, BMW launches the X5, its first Sport Activity Vehicle. Your humble correspondent does a passable impression of then-Product-Development-Head Dr. Wolfgang Reitzle carefully chanting, repeatedly, "it is still... a BMW," repeatedly that afternoon, backlit by flat-screen footage of an X5 lapping the Nurburgring.

"97% of SUV buyers do not take their vehicles off-road," observed Dr. Reitzle, immediately triggering the media to wonder aloud why BMW needed Land Rover for the remaining 3%.

Sure enough, Land Rover is sold to Ford the following year, while Bimmer's quasi-offroad model receives considerable acclaim, going on to redefine roadholding and steering feedback in the midsize crossover/ SUV segment.

In 1999, BMW seems intent on keeping Land Rover because the brand is the quintessential (read: authentic, premium) offroad specialist. It allows BMW to develop on-road biased all-wheel-drive vehicles (including not only the X5, but also the 3 series xi range), while still being able to claim an ability to offer premium products in every segment.

However, Land Rover's quality woes become an increasing liability, particularly when Britain's CAR magazine publishes internal documents that reveal a series of production faults with the then-new Land Rover Freelander.

Paradoxically, BMW's divesting itself of Land Rover in 2000 results in a more focused approach to its own brand. There is no siphoning of resources to balance this out with a more traditional SUV.