Key Concepts and Questions BMW Group’s Annual Reports

Areas I found difficult to understanding

At first I found BMW Group’s reports to be overwhelming, there is a lot of information to take in. However, after looking over them a few times the information becomes relatively clear. Much of the critical information is repeated throughout the report in a number of different ways. So if you have difficulty understanding something the first time it is often repeated later in the report. I also found the glossary very helpful. There were some terms and abbreviations I was unfamiliar with however I was able to look them up. For example I had not heard of the Deutscher Aktienindex (DAX) but was easily able to check the glossary and determine that it is the German Stock Index. Other than that my lack of knowledge regarding automotive parts meant I had to look some terms up. Although I’m sure someone with a better understanding of cars and motorcycles would find the information very simple to understand. Once I had familiarised myself with the reports I found they were well set out and the headings were clear and simple, making it quick and easy to find information.  

Areas of importance

Reduce CO2 emissions and fuel consumption

BMW Group appears to be highly concerned with reducing CO2 emissions and fuel consumption in the vehicles they produce. All three reports stress the importance of minimising environmental impact and how BMW Group is aiming to lead the way. Efficient Dynamics is one of the important strategies utilised by BMW Group. The reports boast that Efficient Dynamics combines efficient engines and a lightweight design to reduce fuel consumption and CO2 emissions. Below is an excellent YouTube video created by BMW USA explaining Efficient Dynamics. 

The 2011 report especially highlights BMW Groups commitment to improving the efficiency of their vehicles. During 2011 the company’s expenditure increased. The report explains that this was due to increased research as well as the opening of a new carbon fibre manufacturing plant, which would assist in the increased manufacturing of lighter materials for vehicles, with the aim of reducing fuel consumption and CO2 emissions.

Sustainability

All three reports also outline the importance of sustainable manufacturing and BMW Group’s high environmental and social standards. For the past 15 years BMW Group has maintained its position as one of the top three most sustainable carmakers worldwide, according the Dow Jones Sustainability Index.

Key challenges and how they are met

Oil and raw material prices

One of BMW Group's main challenges appears to be the price of oil and raw materials. The reports explain that the price of crude oil remains high due to conflicts occurring in the Middle East. While certain materials such as steel decreased in price during 2012, the price of other metals continues to rise. BMW Group has two main strategies in place to address this issue. Firstly, the commodities markets are closely monitored. Seconding, BWM Group establishes secured price agreements with raw material producers.

Economic environment:

The current economic environment is another challenge the BMW Group faces. The reports stress that the instability of the world economy and the debt crisis in Europe could affect car and motorcycle sales. However the company appears to be successful in meeting this challenge. BMW Group has a large economic market covering the three main economic regions. Because of this the company is not dependent on one region and a lack of sales in one area is often made up for in another. Also BMW Group’s production centres are located in various countries across the world. Therefore, the company is able to quickly adapt to world economic changes by adjusting where their products are produced.