BMW under Pressure: Price cuts in Premium Class

July 23, 2013 | Author: MotorBlog.com | am

Filed Under: MotorBusiness, MotorNews

BMW under Pressure: Price cuts in Premium Class

The recession in southern Europe has dampened BMW’s dynamism and put pressure on prices. According to concern head Norbert Reithofer in an interview with a German newspaper, large cuts in prices were “not appropriate” in the premium automobile sector. But the competition was “very intense, so that we cannot ignore market development.”

He added that BMW was trying to avoid price reductions as far as possible yet still maintain its market share. He admitted that it would be “very expensive to regain lost market share.”

Reithofer described the situation in the western European market as “still difficult” due to the euro currency crisis. This was particularly the case in Italy, Spain and France. He added that Germany “is also no longer a guaranteed market”.

The BMW head fears that the western European market will contract by around 5% in 2013, and therefore remain “very challenging”. The Bavarian car builder is driving expansion outside of the confines of Europe, with the old continent’s proportion of sales correspondingly decreasing.

BMW aims for a proportion of sales in Europe of around 40%: China, North America and the rest of the world should in future each make up 20% of the rest of the company’s sales.

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BMW Bayerische Motoren Werke AG (BMW; English: Bavarian Motor Works) is a German automobile, motorcycle and engine manufacturing company founded in 1917. BMW is headquartered in Munich, Bavaria, Germany. It also owns and produces the Mini marque, and is the parent company of Rolls-Royce Motor Cars. BMW produces motorcycles under BMW Motorrad and Husqvarna brands. In 2010, the BMW group produced 1,481,253 automobiles and 112,271 motorcycles across all its brands. Read more

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