????Amid this difficult economic environment, sales of import luxury cars in the U.S. have actually improved. One manufacturer in particular stands out -- not just for its performance today but also for its development of future strategies. That company is BMW Group. Instead of merely indulging in its prosperity, it is investing in new structural technologies and venturing ever further into the post-oil world.
????First, a look the present. BMW brand sales in the U.S. for the first ten months of 2011 were up 13%, even though production of its two best-selling models, the 3-series and 1-series, is winding down in anticipation of model changeovers. With unit sales of 199,552, BMW is closing in on Mercedes-Benz for luxury car sales leadership.
????BMW's Mini brand isn't doing badly either. With the addition of the Countryman SUV, its sales have climbed this year to 47,050 from 38,538. The only group laggard is Rolls-Royce, which is selling in the low double digits. BMW's performance in the U.S. paled in comparison to China, now the world's largest car market. Sales there jumped 21% in the third quarter, and BMW is confident it can maintain the momentum even as the Chinese economy cools.
????These robust sales have supercharged financial results. BMW's third-quarter earnings before interest and taxes rose by 44% year over year, while profit before tax went up 21%. The operating profit on autos was 11.9%, dwarfing Mercedes and causing one analyst to crow that BMW was simply "out-executing" its longtime competitor. An understandably ebullient chairman Norbert Reithofer said "We have recorded the best third quarter in the company's history. During this period, we achieved new records for sales volume, revenues, and earnings."
????The opinion of analysts is almost unanimous: BMW remains one of the best-managed and best- positioned OEMs globally, with a great brand. It should continue to benefit from an improving model range, cost-restructuring, and growth in China.
????BMW is also making an aggressive effort to reduce development and piece costs. Analysts say it will save 7% to 9% on parts costs for both the 1 and the 3. Many parts and components have been purchased at fixed prices for the lifetime of the new model. BMW has also lowered vehicle-testing costs by 30%.
????With this remarkable performance in hand, BMW's best days lie ahead of it. The new 1-Series, its lowest-priced line, was unveiled at the Frankfurt show in September and is now being rolled out across Europe. The new 3-series, the model line that accounts for more than half of BMW's U.S. sales, will reach dealers in 2012. Early reviews are inconclusive, but its engineers have achieved the remarkable feat of making the 3 larger while still reducing its weight by 90 pounds.
