6/22/2010

A spring of success for Bavaria’s carmakers

BMW increased its sales of cars by nearly 14% in the first quarter of 2010 on a y/y basis. Audi did even better, registering a 26% rise. Bavaria’s Big Two carmakers also racked up correspondingly high sales and earnings rises in the period.

BMW’s first quarter profits, in fact, exceed those achieved in all of 2009, itself a year of commendably strong performance for the Munich-headquartered company.

Add in the similarly strong results achieved by truck and bus manufacturer MAN, and it’s no wonder that Bavaria’s automotive sector as a whole is back on track for strong growth. In February (latest reporting period), the sector recorded increases of 15.4% in new orders and a whopping 27% in output.

The state’s automotive industry’s performance is helping boost the manufacturing sector as a whole. Its February scorecard: new orders up 17.9% and output up 6.4%.

Driving the automotive sector’s upswing is an explosive rise in    demand in such fast-growing markets as China or India. This demand is due to the state manufacturers’ achieving of what was regarded as an impossible feat: maintaining the performance and looks making their cars bywords for motoring elegance while dramatically improving their environmental compatibility.

This improvement has been attained by sharply improving fuel efficiency and reducing emissions in existing models and by adding first compacts and now hybrids and E-cars (see related story) to the manufacturers’ ranges.

Another key factor spurring sales: the high—and in many cases—top rankings of quality and reliability conferred upon the cars produced by BMW and Audi. 

Key point: the manufacturers aren’t achieving all this by themselves, but, rather, through the close working relationships they maintain with their suppliers and research institutes. Of these, 1,150 are state members of BAIKA—Bavaria’s initiative for automotive supply excellence.

Nodes of such working relationships include the northern Bavarian city of Hof’s Technicum facility for applied automotive development and testing.

Source: Invest in Bavaria, Business Bavaria newsletter, Issue 6 2010

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