BMW 2009 Annual Report Download - page 40

38
12 Group Management Report
12 A Review of the Financial Year
14 General Economic Environment
18 Review of Operations
42
BMW Group – Capital Market
Activities
45 Disclosures pursuant to § 289 (4)
and § 315 (4) HGB
48 Financial Analysis
48 Internal Management System
50 Earnings Performance
52 Financial Position
54 Net Assets Position
56 Subsequent Events Report
56 Value Added Statement
58 Key Performance Figures
59 Comments on BMW AG
63 Internal Control System
64 Risk Management
70 Outlook
Further improvements in profitability along the
value-added chain
Our main focus with regard to the purchasing and supplier
network in 2009 was to continue the previous year’s ini-
tiative
of creating the most efficient value-added chain in
the automotive industry.
Working closely with our suppliers, we made further
progress in reducing the cost of materials for
vehicle
projects both in the development and series production
stages. Particular attention was paid to maintaining
the high
level of quality expected by our customers. The
purchasing department was supported in this process
by the development team, particularly in its consistent
application of modular solutions. The increased use of
standardised components enables both time and costs
to be reduced across all models. Important milestones
were therefore set in 2009 with regards to the future pur-
chasing arrangements for the BMW 1 and 3 Series suc-
cessor models.
Parts supply assured despite difficult market
environment
The consequences of the worldwide financial and eco-
nomic
crisis particularly affected the automotive supply in-
dustry during the year under report. Declining production
volumes coupled with simultaneously decreasing liquidity
levels and rising financing costs had a significant impact
on the financial stability of the supplier market, resulting in
a greater incidence of crisis situations among suppliers at
a national and international level. However, a consistent
strategy of risk and intervention management enabled the
various crises to be successfully mastered without having
a lasting detrimental effect on supply security or car pro-
duction quality.
Increasing internationalisation of the purchasing
network
We continued to expand our international purchasing
n e t work with great determination in 2009. By concentrating
on
the Asian and NAFTA regions for new purchase vol-
umes, we were able to make optimal use of cost advan-
tages, while also expanding the scope of so-called “natural
hedging” – the strategy of purchasing in foreign curren-
cies
to minimise exchange risks. With this in mind, re-
gional experts
with a good understanding of purchasing,
quality and logistics issues analyse the various procure-
ment
markets and suppliers in close cooperation with cen-
tralised management functions. This strategy will enable
us to achieve cost and currency benefits on purchases for
future models. The basis for this was laid in 2009 with the
selection of suppliers for the BMW 1 Series and 3 Series
models.
Future natural hedging volumes are also increased by
placing multi-currency orders (i. e. purchasing individual
components in varying currency proportions) – a practise
we have employed since 2009.
Innovation and technology leadership of BMW
in-house component production maintained
In the fields of bodywork and interiors, our components
plant in Landshut again demonstrated its innovative and
technological
leadership. At the European SPE Auto-
motive Division Award competition held in 2009, the
International Plastics Society presented the highest
awards in the categories “Exterior” and “Interior” to the
BMW Group.
Our light metal foundry also confirmed its technological
leadership. We will be commissioning the world’s first
odourless foundry at our Landshut plant in 2010. The use
of environmentally sustainable binding agents will enable
us to reduce emissions from combustion residues by
98 %.
Greater emphasis on sustainability and innovation
in supplier market
Our stringent requirements for ecological and social
standards are increasingly being applied along the value-
added chains within the supplier network. Suppliers and
their partners must provide detailed proof of their
com-
pliance with the required standards for sustainability in
order to take part in the tendering procedure. As part
of the selection process, our experts check whether pro-
spective suppliers are complying with the required
standards.
Regional mix of BMW Group purchase volumes 2009
in %, basis: production material
Germany 47 NAFTA 1 0
Rest of Western Europe 21 Asia / Australia 7
Central and Eastern Europe 12 Africa 3
Germany
Central and
Eastern Europe
Rest of Western Europe
NAFTA
Asia / Australia Africa