BMW was founded in 1929 and its motorcycles soon became famous for setting speed records. During World War II, BMW built the world’s first jet airplane engines, used by the Luftwaffe, Germany’s air force. After the war the company tried to move into the small-car market but found that it could not compete with Volkswagen’s compact, inexpensive autos. By 1969 the company was on the verge of bankruptcy and owed the equivalent of $29, 000, 000 to the Bavarian government. In that year BMW finally began to pull out of its financial slump when it introduced its new line of cars.
The cars were of conventional design but drove, and were priced, like sports cars. At about the same time, the company introduced a new series of motorcycles, which were particularly popular in Europe. Product has always been king at BMW. The tasks of product concept development and design are to be combined with sales, marketing and materials purchasing in a new task area bearing the title “Market and Product.” Dr.
Wolfgang Reitz le, until now responsible for Research, Development and Purchasing within the Board of Management of BMW AG, will be in charge of this division. Product engineering is to be combined with the tasks of manufacturing planning and production to form a new “Engineering and Production” task area to be headed by Prof. Joachim Mil berg, hitherto Member of the Board of Management of BMW AG responsible for Production. The traditional Research and Development, Production and Sales and Marketing Divisions will benefit from novel, process-oriented structures which are unprecedented in the automotive industry. Already many years ago, BMW first implemented the principle of inter divisional project organization when creating its Research & Development Center (FIZ).
The latest reorganization represents the next logical progression. Bernd Pischetsrieder, Chairman of the BMW Board of Management of BMW AG, regards the reorganization, coming on the back of BMW’s most successful year to date, as a further significant step towards securing the company’s long-term success. “By interlinking our sales and marketing functions with the concept development of new products, we establish a basis for extending our lead. Process-oriented engineering will yield even faster and more accurate results. In the same way that we laid the foundations of our current success by making changes in the corporate organization in the past, this consistent stop serves as the basis for success in years to come,” Mr. Pischetsrieder said.
The chief characteristic of the year 2001 for the BMW Group was its current product and market offensive, spurred on by a 26. 4% increase in capital expenditure to euro 3, 516 million. The capital expenditure ratio (capital expenditure as a percentage of Group revenue amounting to euro 38, 463 million) was therefore 9. 1%. In accordance with the requirements of International Accounting Standards (IAS), which were adopted by the BMW Group for accounting and financial reporting in 2001, capital expenditure also includes development costs of euro 665 million which have been recognized as assets. The bulk of capital expenditure related to the BMW Automobiles segment with a total volume of euro 3, 055 million (+28.
6%). Extensive measures have been taken in this segment to prepare for the launch of new models, to ensure that the Group maintains its technological and innovative leadership and to expand production capacities. As in previous years, capital expenditure was financed fully out of cash flow which increased in 2001 to euro 4, 202 million (+11. 1%).
The product range was expanded in 2001 by the successful launch of the new BMW 7 Series and the new MINI brand models in Europe. Other BMW product innovations in 2001 were the new 3 Series compact model, the M 3 convertible, the updated BMW 3 Series and the X 5 4. 6 is. The BMW Group delivered a total of 905, 700 cars to customers in 2001. The number of BMW-brand cars delivered to customers went up by 7. 1 % to 880, 700 units, a new record.
This growth was due principally to the strong demand for the various models of the BMW 3 Series and the market success of the Sports Activity Vehicle BMW X 5. In addition, some 25, 000 MINI brand vehicles (including 10, 650 in Great Britain) were sold between July 2001, when the MINI was launched, and 31 December 2001. The sales volume of BMW Motorcycles (including the C 1) rose by 17. 3 % to 95, 350 units. Demand was greatest in the year 2001 for the BMW 3 Series delivered to 534, 255 customers worldwide (previous year 509. 007 units), followed by 194, 321 5 Series (previous year 191.
546 units). Sales of the BMW X 5 were also extremely positive, more than doubling to 82, 705 units following deliveries of 38, 282 units in the previous year.