BMW 2015 Annual Report Download - page 65

65 COMBINED MANAGEMENT REPORT
year. The positive trend in the USA is expected to
continue.
Financial services markets
The trend towards more normal rates of growth in
China, together with weaker signals coming from other
emerging markets, is bound to have an influence on
global trade, and hence on export-oriented industrialised
countries in 2016. While the Chinese central bank will
no doubt be directing its attention to measures aimed at
stabilising the domestic economy, other key central
banks are likely to focus on achieving price stability.
In the USA, stable economic growth, the improving em-
ployment situation and higher inflation could induce
the Fed to raise interest rates moderately over the course
of the year.
In the eurozone, interest rates are set to remain low over
the coming year. Factors such as stubbornly low infla-
tion rates, steady economic recovery and uncertainty re-
garding economic developments on major emerging
markets could persuade the ECB to continue its bond-
buying programme.
Depending on rates of growth and inflation on the
domestic
front and developments in key emerging
economies, the UK could well see a first interest rate
rise at some point in 2016. Uncertainties prevailing
prior to the referendum on a possible exit from the EU
could, however, forestall a return to more accustomed
monetary policies.
The Japanese economy is again only likely to see slow
growth in 2016. Even though consumer spending vol-
umes should rise on the back of the Bank of Japan’s ex-
pansionary monetary policy, other unfavourable factors,
such as weak demand from China, could stand in the
way of a sustainable upturn.
Expected consequences for the BMW Group
Future developments on international automobile
markets also have a direct influence on outcomes for
the BMW Group. Whereas competition might intensify
in contracting markets, new opportunities beckon in
growth regions. Sales volumes in some countries are
likely to be affected by a range of new competitive chal-
lenges. The dynamic growth seen on European mar-
kets in 2015 is not expected to maintain the same pace
in 2016. The Americas region should see a continua-
tion of the upward trend of previous years. Despite
the ongoing process of normalisation on the Chinese
market, sales volumes in Asia could well pick up
again.
Due to its global business model, the BMW Group is well
placed to exploit opportunities, including those arising
at short notice. Outstanding coordination between the
Group’s sales and production networks also helps cush-
ion the impact of unforeseeable developments in its
various regions. Investing in markets with good future
prospects is also a basis for further growth, while simul-
taneously expanding the global presence of the BMW
Group. Thanks to its three strong brands – BMW, MINI
and Rolls-Royce – there is every reason to assume that
the BMW Group will continue performing successfully
during the current year.
Outlook for the BMW Group
BMW Group
Profit before tax: slight increase expected
Competition on international automobile markets is set
to remain fierce in the current year. Furthermore,
con-
tinuing normalisation on the Chinese market and develop-
ments
in Russia are likely to influence the pace of earn-
ings growth. Political and macroeconomic uncertainties
in Europe may also play a role (see the section “Political
and global economic risks” in the risk report).
Nevertheless, the BMW Group expects to remain firmly
on course for growth in 2016. Attractive products and
services, covering the entire spectrum of individual mo-
bility, will continue making a substantial contribution
to further improving earnings. This upward trend will,
however, be held down by rising personnel expenses
and high levels of investment in projects that ultimately
help safeguard future competitiveness. Overall, Group
profit before tax is expected to increase slightly year-on-
year (2015: € 9,224 million).
Workforce at year-end: slight increase expected
The BMW Group will continue to recruit staff in 2016,
spurred by growth in the automobile and motorcycle
lines of business on the one hand and the expansion of
its financial and mobility services on the other. Based
on our latest forecasts, we expect a slight increase in the
size of the workforce (2015: 122,244 employees) during
the coming twelve-month period.