Bayerische Motoren Werke AG · XETR:BMW
Bayerische Motoren Werke — BMW Group — BMW Group Finance Analysts Conference 2012
30 slides from Bayerische Motoren Werke's conference presentation, Mar 14, 2012
Slide 1: Is Premium Future Proof?
BMW Group Finance Analyst and Investor Analysts Conference, Conference, 14th2012 March March 2012 BMW Group Finance Analysts Conference, March 2012 IS PREMIUM FUTURE PROOF? KLAUS FRÖHLICH, SVP BRAND AND PRODUCT STRATEGIES.
Slide 2: Brand and Product Strategies
BRAND AND PRODUCT STRATEGIES. Page 2
Slide 3: BMW Group Premium Strategy
BMW GROUP PREMIUM STRATEGY. Page 3
Slide 4: Questions About Customers
QUESTIONS ABOUT CUSTOMERS. What characterizes customers in the different regions of the world? What are expectations and requirements regarding “premium”? What are the external conditions he / she has to deal with? Which values / attitudes drive his / her decision? Which future trends can be detecte
Slide 5: What Is Premium?
WHAT IS PREMIUM? Why? What? Psychologic needs Social acceptance Increased quality Enhanced comfort and convenience Individuality Lifestyle More beautiful design Pampering Customer Care … Page 5
Slide 6: Luxury Is a €1 Trillion Global Growth Industry
LUXURY IS A €1 TRILLION GLOBAL GROWTH INDUSTRY. Investment & charity Luxury products: cars, boats, airplanes Luxury services: travel & health Soft and hard luxury Page 6
Slide 7: Examples
EXAMPLES. Revenue in € millions 2010 2011 +16% 23,659 20,320 +33% 6,892 5,176 Revenue by region 2011 Source: Annual Reports 2011 LVMH, PPR Luxury Goods, Richemont Page 7
Slide 8: Luxury Market: A Durable Growth
LUXURY MARKET: A DURABLE GROWTH. Growth is fueled by: demographics, urbanization, worldwide communication and travels, increase of purchasing power (higher wages, lower costs of basic goods). Growth is non-linear: Willingness to spend more is higher for luxury goods than for basic goods. P
Slide 9: Customer Preferences Differ From Region to Region
CUSTOMER PREFERENCES DIFFER FROM REGION TO REGION – BUT PREMIUM BRANDS WORK GLOBALLY… Page 9
Slide 10: Customer Understanding of Premium Cars Is Globally Almost Identical
...AND THE CURRENT CUSTOMER UNDERSTANDING OF PREMIUM CARS IS GLOBALLY ALMOST IDENTICAL. not mass Substance & Solidity Brand heritage market comfortable Lots of safety features timeless Better materials worth the money desire high quality safety size convenient craftsmanship good acceleration Premium
Slide 11: Theses About Changing Automotive Markets: Newspaper Headlines
THESES ABOUT CHANGING AUTOMOTIVE MARKETS: NEWSPAPER HEADLINES. Page 11
Slide 12: Automotive Premium Upper Class: Different Distinction
AUTOMOTIVE PREMIUM UPPER CLASS: DIFFERENT DISTINCTION REFLECTS LOCAL SPECIFICS. Prestige Exclusivity Elegance Understatement Success Success Recognition Status Status Sophistication Passion Privacy Pride Extravagance Opulence Intrinsic Extrinsic Page 12
Slide 13: Healthy Outlook for Premium Segment
HEALTHY OUTLOOK FOR PREMIUM SEGMENT IN ABSOLUTE TERMS AND MARKET SHARE. 25% Premium Share of Total Car Market 20% 15% 10% 5% 0% EU USA China Japan BRIKT Source: STAR Registrations, IHS Global Insight 2000 2010 2020 Page 13
Slide 14: Local Specifics of Established Markets: Europe
LOCAL SPECIFICS OF ESTABLISHED MARKETS: EUROPE. Ageing, wealthier Small households, core families Premium seen as refinement, low prestige (show-off) orientation Sophisticated brand understanding Car ownership is standard Political key target to reduce CO2 emissions Premium Car Expectati
Slide 15: Established Markets: Europe. Stable Premium Market Prognosis
ESTABLISHED MARKETS: EUROPE. STABLE PREMIUM MARKET PROGNOSIS. Page 15
Slide 16: Established Markets: Europe. Stable Premium Market Prognosis
ESTABLISHED MARKETS: EUROPE. STABLE PREMIUM MARKET PROGNOSIS. , , , , , , , , , , , , , , Prognosis Source: STAR Registrations, Global Insight Page 16
Slide 17: Local Specifics of Established Markets: USA
LOCAL SPECIFICS OF ESTABLISHED MARKETS: USA. Slightly ageing society, midsize households Very sensitive regarding short-term events Often low brand understanding Premium seen as expression of power, relatively high prestige orientation Alternative drives have to offer economic advantages
Slide 18: Established Markets: USA
ESTABLISHED MARKETS: USA. Page 18
Slide 19: Established Markets: USA
ESTABLISHED MARKETS: USA. Modes of Automotive Distinction Favorable Body Design Features Page 19
Slide 20: Local Specifics of Established Markets: Japan
LOCAL SPECIFICS OF ESTABLISHED MARKETS: JAPAN. Heavily ageing society, small households Front runner regarding multi-modality Premium is seen as refinement (technology), also prestige orientation High brand understanding Very open towards alternative drives (due to incentives) Policies w
Slide 21: Established Markets: Japan. Growing Premium Relevant Income Groups
ESTABLISHED MARKETS: JAPAN. GROWING PREMIUM RELEVANT INCOME GROUPS. Page 21
Slide 22: Established Markets: Japan. Growing Premium Relevant Income Groups
ESTABLISHED MARKETS: JAPAN. GROWING PREMIUM RELEVANT INCOME GROUPS. 45 45 40 40 Number of HH With an Annual Income of x (in Millions) Number of HH With an Annual Income of x (in Millions) 35 35 HNWI 30 30 $150K+2,5 $150K+ 2.5 25 25 $100-150K $100-150K 2,0 2.0 $90-100K $90-100K 20 20 1,5 1.5 $80-90K
Slide 23: Local Specifics of Fast Growing Market: China
LOCAL SPECIFICS OF FAST GROWING MARKET: CHINA. On the way to car-orientation Very many first-time-car-buyers. Car ownership is indicator of success Premium is seen as prestige and defined by size High demands regarding brand reputation. Low trust in local brands and OEMs High innovation op
Slide 24: Clear Brand Desire: China Top Luxury Brands
CLEAR BRAND DESIRE: CHINA TOP 10 LUXURY BRANDS. GLOBALLY ORIENTED PREMIUM CUSTOMERS. 1. BMW 2. Cartier 3. Rolex 4. Apple 5. Microsoft 6. Salvatore Ferragamo 7. Nintendo 8. Mercedes 9. Tiffany 10. Four Seasons Source: China Clear Brand Desire 2011 Page 24
Slide 25: Fast Growing Market: China. Moving Up = Moving Into Premium
FAST GROWING MARKET: CHINA. MOVING UP = MOVING INTO PREMIUM. Page 25
Slide 26: Fast Growing Market: China. Moving Up = Moving Into Premium
FAST GROWING MARKET: CHINA. MOVING UP = MOVING INTO PREMIUM. Large Sedan: 11% Premium Share : 100% Avg. Age: 37 Next Car Concept: Medium Sedan: 58% Premium Share: 65% Avg. Age: 35 Current Car Concept: Small Sedan: 11% Premium Share : 3% Page 26
Slide 27: Local Specifics of Emerging Markets: Brasil
LOCAL SPECIFICS OF EMERGING MARKETS: BRASIL. Highest grade of urbanisation (87%) Juvenile car market Premium is seen as power and status, prestige orientation is limited (due to security concerns) High demands regarding brand reputation Moderate openness towards alternative drives (bivalen
Slide 28: Emerging Markets: Brasil. Young, Well Educated and Looking for Premium
EMERGING MARKETS: BRASIL. YOUNG, WELL EDUCATED AND LOOKING FOR PREMIUM. Page 28
Slide 29: Emerging Markets: Brasil. Young, Well Educated and Looking for Premium
EMERGING MARKETS: BRASIL. YOUNG, WELL EDUCATED AND LOOKING FOR PREMIUM. Page 29
Slide 30: Premium Is Future Proof!
PREMIUM IS FUTURE PROOF! 1. Premium segments grow globally 2. Customer needs regarding premium are stable and well understood 3. The Premium principles work all over the world 4. Nevertheless: Transfer into products, services and brand building needs to reflect volatility and bandwidth of local requ
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