BMW 2007 Annual Report Download - page 16

14 Group Management Report
10 Group Management Report
10 A Review of the Financial Year
13 General Economic Environment
17 Review of Operations
41 BMW Stock and Bonds
44 Disclosures relating to Takeover
Regulations and Explanatory Report
47 Financial Analysis
47 – Internal Management System
49 – Earnings Performance
51 – Financial Position
52 – Net Assets Position
55 – Subsequent Events Report
55 – Value Added Statement
57 – Key Performance Figures
58 – Comments on BMW AG
62 Risk Management
68 Outlook
The British pound was slightly more volatile in
2007 than in preceding years. Following a healthy
start, it lost in value over the course of the year, finish-
ing at about GBP 0.73 to the euro.
The Japanese yen remained weak against the
euro. After a short period of appreciation around the
middle of the year 2007, the yen then went on to lose
value
and closed at yen 164 to the euro, some 4.5 %
lower than one year earlier.
Further increases in raw material prices
The average price of oil in 2007 was once again
higher than in the previous year. After dropping to
approximately US dollar 50 per barrel in January, the
price almost doubled over the course of the year and
by autumn it had risen to almost US dollar 100 per
barrel. The average cost during the year was roughly
US dollar 70 per barrel, up by more than 10 % com-
pared to 2006. The main reasons for this were on-
going shortages in oil production and processing
capacities, supplies being held back by OPEC and
the fact that some of the world’s oil-producing coun-
tries are currently unstable. This situation was fur-
ther exacerbated by rising demand, mainly from the
emerging markets and also by a certain amount of
speculation.
The price of steel again exceeded the level of
the previous year. This was also largely due to a fur-
ther sharp rise in demand coming mainly from the
emerging markets. The prices of most precious
metals have been rising continually for several years
and this trend continued in 2007. In addition to in-
creased demand, the loss in value of the US dollar
has created additional demand for precious metals
as investments, in particular in the emerging mar-
kets.
Automobile markets in 2007
The sale of cars rose worldwide by approximately 4 %
in 2007 and therefore slightly faster than in the pre-
vious year. As in the preceding years, the three main
traditional car markets (the USA, Japan and Western
Europe) did not show any significant momentum
in terms of growth rates, whereas the car markets in
Asian and Latin American emerging economies
again grew strongly.
Sales of passenger cars in the USA fell again,
this time by approximately 2.5 % to 16.1 million units.
Whereas in the previous year the market for light
trucks had contracted drastically, the reduction in
2007 was spread across all segments of the market.
The market share held by US manufacturers con-
tinued to decline and stood at just over 50 %.
The number of cars sold in Western Europe was
static with new vehicle registrations stagnating at
around the 14.8 million mark. This was largely due
to the sharp decrease in Germany, where car sales
fell by more than 9 % to below 3.2 million units.
Steel price trend
(Index: January 2003 = 100)
Source: German Federal Statistical Agency
03 04 05 06
180
170
160
150
140
130
120
110
100
07
Exchange rates compared to the Euro
(Index: 31 December 2002 = 100)
140
135
130
125
120
115
110
105
100
03 04 05 06 07
US
Dollar
Source: Reuters
Japanese Yen British Pound