Market Shares by Region

74 Summary of Total Vehicle Sales

The total vehicle sales growth forecast is summarized in table 1.11. Over the short-medium term it is believed that Asia/Oceania and North America will be the driving markets in terms of growth, whereas the European market is likely to struggle due to the sovereign debt issues and high unemployment rate in certain countries in the region. Over the longer term it is believed that the European market will somewhat recover, but remain as the lowest growing market, whereas growth in North America is likely to stagnate somewhat after a recovery period with high growth. It is further believed that Asia/Oceania will remain the growth leader over the longer term, together with the “other markets”, which mainly includes South America and Africa.

Table 1.11 – Forecasted market growth

Forecasted Market Growth

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Germany 2,2% 2,0% 1,8% 1,6% 1,4% 1,4% 1,4% 1,4% 1,4% 1,4%

Rest of Europe -2,1% -1,0% 0,0% 1,0% 1,4% 1,4% 1,4% 1,4% 1,4% 1,4%

North America 9,5% 7,5% 5,5% 3,5% 2,4% 2,4% 2,4% 2,4% 2,4% 2,4%

Asia/Oceania 9,2% 8,0% 6,5% 5,0% 4,5% 4,5% 4,5% 4,5% 4,5% 4,5%

Other Markets 4,3% 4,0% 4,0% 4,0% 4,0% 4,0% 4,0% 4,0% 4,0% 4,0%

(Source: Own creation)

75 Although BMW has adopted the common platform strategy over the last few years, released several new car models, and main competitor Mercedes-Benz has lost some of its market shares in Europe, BMW has been unable to increase their market share notably in these regions over the period analyzed. According to Daniel Schwartz, Mercedes-Benz has already started developing its own common platform, which may make them more competitive over the medium-long term and possibly regain some of its lost market share in Europe at the expense of BMW and other premium car manufacturers. Furthermore, Tim Schuldt raises concern over whether the BMW Group will be able to adapt to the strict CO2-emissions limit that has already taken effect across the European Union, and will be further expanded over the coming years. It is believed that these new regulations represent a major challenge for car manufacturers, and especially premium car manufacturers, that may need to develop and sell smaller and more environmental friendly vehicles in order to comply with these new regulations.

In summary, it is believed that BMW may be able to maintain their market shares in the European markets over the short-medium term, but that they may struggle to adapt to the strict CO2-emission limits over the longer term, and hence possibly lose some of its market shares in the region. As such, BMW’s market share in Germany is forecasted to remain at 9.0 percent in 2012 and 2013, but eventually decrease to 8.6 percent in 2014, and 8.2 percent in 2015, and 7.8 percent from 2016 onwards. BMW’s market share in the rest of Europe is believed to follow a similar trend, and is as such forecasted to remain at 4.2 percent in 2012 and 2013, but decrease to 4.0 percent in 2014, and 3.8 percent in 2015, and 3.6 percent from 2016 onwards.

North America

BMW has slightly increased their market share in North America over the period from 2006-2011, where they held a market share of 2.24 percent in 2011, up from 1.74 percent in 2006. As noted in the strategic analysis, BMW introduced several new car models to the North American market over the last years, and also offered discounts on cars in an attempt to capture additional market share and in order to hedge somewhat against overexposure to the Chinese market (Reiter and Ohnsman 2011). BMW and other premium car manufacturers may also have benefited somewhat from Lexus’ inventory problems after the earthquake in Japan in March 2011.

Since BMW may not be able to offer similar price discounts to gain market share in the future, and because Lexus’ inventory problems may have helped them gain additional market share in 2011, it is

76 believed that BMW may struggle to maintain their current market share of 2.24 percent. As such, BMW’s market share in North America is forecasted to decrease to 2.1 percent in 2012, further decrease to 2.0 percent in 2013, and remain at 2.0 percent thereafter.

Asia/Oceania and Other Markets

BMW has considerably strengthened their market position in the Asia/Oceania region over the past six year period, where they held a market share of 1.18 percent in 2011, up from 0.71 percent in 2006. In the “other markets” region, BMW had a market share of 1.67 percent in 2011, a somewhat lower share than most other years from 2006-2011, although they have held a relatively constant market share ranging from 1.64 to 1.85 percent over the last five years in this region.

According to BMW Group (2012), BMW intends to capitalize on the future growth potential in the emerging markets, such as China, India, South Korea and Brazil, in addition to Russia and Turkey. BMW is also planning to increase their production capacity in many of these countries, and is for instance planning to produce up to 300,000 vehicles per year at the Shenyang site in China in the future, up from around 98,000 vehicles produced at the site in 2011 (BMW Group 2012).

Although BMW has increased their market share in the Asia/Oceania region considerably over the last few years, they still hold a relatively low market share in this region compared to most other regions.

With plans of increasing their market presence and production capacity in the region, it is believed that BMW may be able to further increase their market share in Asia/Oceania in the future. As such, BMW’s market share in Asia/Oceania is forecasted to increase to 1.25 percent in 2012, 1.30 percent in 2013, 1.35 percent in 2014, 1.40 percent in 2015, and 1.45 percent from 2016 onwards. For the other markets region, it is believed that BMW will continue to hold a market share around 1.7 percent, thus BMW’s market share in this region is forecasted to remain at 1.7 percent over the forecast period. Table 1.12 illustrates the forecasted market shares of BMW.

77 Table 1.12 – Forecasted market share of the BMW Group

Forecasted Market Shares

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Germany 9,00% 9,00% 8,60% 8,20% 7,80% 7,80% 7,80% 7,80% 7,80% 7,80%

Rest of Europe 4,20% 4,20% 4,00% 3,80% 3,60% 3,60% 3,60% 3,60% 3,60% 3,60%

North America 2,10% 2,00% 2,00% 2,00% 2,00% 2,00% 2,00% 2,00% 2,00% 2,00%

Asia/Oceania 1,25% 1,30% 1,35% 1,40% 1,45% 1,45% 1,45% 1,45% 1,45% 1,45%

Other Markets 1,70% 1,70% 1,70% 1,70% 1,70% 1,70% 1,70% 1,70% 1,70% 1,70%

(Source: Own creation)