BMW is a world class manufacturer of automobiles and motorcycles, with wholly owned subsidiaries located throughout the world. Its products are recognized as premium products in their respective markets, and the company manufactures and distributes its products and parts throughout the world. The company is based in Germany and has survived the recent European recession and reunification of Germany better than the European automotive industry as a whole. BMW has continued to improve its market position in the global marketplace, and has posted earnings for each of the years from 1989 to 1993. This research examines BMW's current financial position and is based on the company's 1993 Annual Report. All currency amounts are in Deutchemarks.
BMW produces automobiles and motorcycles, with the bulk of the company's business coming from the automotive sector. In 1993, production of automobiles stood at 535,960 units, which was down from 598,145 units in 1992 and 553,230 units in 1991. This represents a four percent decline from the 1991 level, and an 11 percent decline from the 1992 level. Production of motorcycles continued on an upward trend for those three years, with an increase of six percent from 1991 to 1992, and of three percent from 1992 to 1993, to a level of 36,990 units.
The company's sales declined when measured in monetary terms from 31.241 billion DM in 1992 to 29.016 billion DM in 1993. This represents a decline of seven percent. Sales increased from 1991 to 1992, but at a decreasing rate when compared to sales from 1990 to 1991 (9.8 percent versus 4.7 percent for the most recent period).
The company's net income decreased from 726 million DM to 516 million DM from 1992 to 1993. This represents a decrease of 29 percent. That the company's income declined 29 percent on a decline in sales of seven percent suggests that BMW is not demonstrating the type of long-term management acumen that would be critical to...