BMW 2010 Annual Report Download - page 73

71 GROUP MANAGEMENT REPORT
Motorcycle markets in 2011
Despite the economic recovery in many countries, motor-
cycle markets contracted sharply again in 2010. We ex-
pect the situation to stabilise in some regions in 2011 and
market performance as a whole is likely to display a lateral
movement. For the 500 cc plus segment, however, we
forecast a low single-digit growth rate.
Financial Services market in 2011
There are favourable signs that the global economic up-
swing will continue in 2011, although probably at a less
pronounced rate than in 2010. Given the substantial spare
capacities and moderate inflation rates currently prevail-
ing in the major industrial countries, central banks are
likely to continue their expansionary monetary policies
for the time being.
The US Reserve Bank has extended the range of expan-
sionary monetary policy measures taken. Given the over-
cast economic outlook, the zero-interest-rate policy
being pursued in the USA is unlikely to be abandoned
before the beginning of 2012. The European Central
Bank will not raise its refinancing interest rate before the
fourth quarter 2011 as long as there is a risk of a renewed
debt crisis. During the first half of the year the European
Central Bank could reduce excess liquidity step by step,
which could well cause interest rates in the medium-term
maturity segment to rise.
Providers of financial services are exposed on the one
hand to risks arising from uncertainties and volatility on
financial markets. On the other hand, however, measures
to reduce public spending could result in tax increases
worldwide and hence force down domestic demand.
The process of consolidating dealer organisations will
continue in a number of markets in 2011. As a result of
the related increase in risk, further credit-related losses
for the sector cannot be entirely ruled out for 2011.
It is currently very difficult to predict how used car
markets
will develop. Prices for pre-owned cars are likely
to stagnate during the coming twelve months. If the
economy falters, prices could fall again.
Outlook for the BMW Group in 2011
We expect macro-economic conditions to remain stable
in 2011. However, the threat of temporary setbacks
caused by knock-on effects from the recent crisis cannot
be ignored. International car markets are likely to con-
tinue
performing well and the Group’s growth markets
are expected to expand rapidly. Economic recovery should
continue to make progress in the USA and give our sales
volumes another boost. Taking all of these factors
into
consideration, the BMW Group will continue to perform
well in 2011.
Over the past year new models, innovative technologies
and attractive design have additionally driven customer
demand, which was already at a high level. Following on
from the introduction of new BMW 5 Series Sedan, the
new BMW 5 Series Touring has been available since mid-
autumn 2010
. The BMW X1 isproving to be exceedingly
popular worldwide. The MINI range has been expanded
since autumn 2010 to include a fourth model, the MINI
Countryman. The Rolls-Royce Ghost is also experiencing
a high level of customer demand. On the heels of the
models introduced over the past year, we will be continu-
ing our new product initiative throughout 2011. In this
context we are currently rejuvenating the BMW 6 Series:
the Convertible will be available in Europe and Asia in
the spring, followed by the USA and other markets at the
beginning of May. The 6 Series Coupé will be launched
inautumn 2011. The new BMW X3, currently enjoying
great success in its class, will be launched worldwide over
the course of the year. The BMW 1 Series M Coupé will
come on to the markets in May, followed by the new
BMW M5 in autumn after its world debut at the IAA. The
new generation of the BMW 1 Series will also go on sale
from autumn 2011 onwards. The MINI Coupé will become
the fifth MINI model variant to join the family.
Engagement on growth markets, particularly Latin
America and Asia, and a wider international production
network resulting from the expansion of our plants in
the USA and China are helping us strengthen the BMW
Group in competitive terms. We are therefore laying the
foundation for profitable growth in the future.
We will continue to pursue a policy of rigorous cost
management in 2011, centred on the management of
fixed costs and working capital. The strategy also includes
the efficient utilisation of resources. The use of modular
and industrial standards is helping us to generate bene-
fits of scale and reduce production costs, an important
element in our new efficient development strategy, and
reflected in our R & D ratio of 4.6% (2009: 4.8%).
Our Strategy Number ONE remains the basis for the
BMW Group’s strategic realignment. Improvements