BMW is one of the best-known luxury car names in the world today. Some people identify with the brand because it's a status symbol but others find themselves in the driver's seat for the pure thrill of the ride. Sales for the German car giant were rising until the 2020 global crisis depressed car purchases.
BMW reported sales of more than 2.3 million vehicles worldwide in 2022, down from 2.5 million in 2021. It had a market capitalization of more than $64.26 billion as of September 2023. It has continued to make improvements and build on its success.
BMW's success involves several entities, including the company's supplier network.
Key Takeaways
- BMW is a household name. It's one of the world's largest high-end automakers with a global presence.
- BMW has relied on a complex network of suppliers for its cars to become efficient on the global stage.
- Some suppliers have been integrated into the company but many still operate as third-party vendors under contract.
A Brief History of BMW
BMW's full company name is Bayerische Motoren Werke. Founded in 1916, the corporation is headquartered in Munich. BMW manufactures cars and motorcycles in 31 production facilities in 15 countries.
It's also the parent company of the luxury Rolls-Royce brand as well as the MINI brand of small cars. The company's stock is traded publicly on the Frankfurt Stock Exchange under the symbol BMW.
The nearly 2.4 million cars sold to consumers around the world in 2023 included models from all three of the company's business segments: BMW, Rolls-Royce, and MINI. It also included 202,895 motorcycles. BMW is among the big three German manufacturers of luxury automobiles along with Mercedes-Benz and Audi. It's one of the biggest-selling luxury car makers worldwide.
Expanding Market Segments
BMW followed other automakers by expanding into emerging markets such as China and India. The company established manufacturing plants in both of these countries in the early 2000s. The Chennai, India plant was opened in 2007.
BMW moved to access other important emerging market economies in 2014 by establishing production plants in Brazil and Mexico. BMW is focused on establishing its own production and marketing its own brand by pushing into emerging markets rather than entering into strategic joint venture partnerships with existing automakers native to the country.
You can purchase an American depositary receipt (ADR) if you want to invest in BMW. It's a negotiable certificate issued by a U.S. bank that represents a specific number of shares of a foreign company's stock.
Supplier Networks
BMW depends upon a network of over 100 auto parts suppliers from all over the globe to manufacture its automobiles but approximately 43% of its suppliers are located in Germany or they're subsidiaries of German-based companies.
Another 34% or so of BMW's suppliers are headquartered in other European countries with about a 55/45 split between Western European countries and Eastern European nations.
BMW emphasizes consciousness toward environmental issues, developing sustainability guidelines for its suppliers. Examples include its guidelines for the use of recycled aluminum in parts and BMW's EfficientDynamics concept, developed to enhance fuel efficiency and reduce emissions. The company has been featured in theDow Jones Sustainability Index(DJSI)since 1999, taking the top spot in2020 and beating out 38 other car companies in the automobiles section.
BMW's automotive parts suppliers and the component parts they've supplied include:
- Brembo: Provides brake calipers
- Dräxlmaier Group: Supplier of interior panels
- Peiker Acustic GmbH: Provider of high-speed mobile Internet for cars. In 2012, BMW became the first automaker to introduce this feature.
- Thyssenkrupp: Supplies steering columns, shock absorbers, and suspension parts
- BorgWarner: Provider of drivetrain components, such as clutches and automatic transmissions
- Elringklinger: Maker of gaskets and exhaust system components
- Mahle: Supplies piston and cylinder components, valve train systems, and air and liquid management systems
- Bridgestone: Supplier of tires
- GKN Driveline: Provides axle assemblies
- Johnson Electric: Supplies cooling and heating fan modules
- Gestamp: Providers of front and rear hood assemblies
- Apag Elektronik AG: Interior lighting components
- Delphi: Battery and electric vehicle charger components
- Hirschvogel: Wheels
- Magna: Body casting stampings
- Harman/Kardon: Interior music and audio systems
Sustainable Supply Chain Management
"Sustainable" loosely translates to "capable of maintaining." BMW indicates that its sustainable supply chain is designed to maintain social and environmental standards. It's based on six sets of guidelines:
- UN Guiding Principles on Business and Human Rights
- Universal Declaration of Human Rights
- Principles of the UN Global Compact
- Principles of the International Labour Organisation
- OECD Due Diligence Guidance for Responsible Business Conduct
- The national action plan of the German government and the German Supply Chain Act
BMW also states that its goal is to minimize the use of raw materials to the extent possible and to simultaneously use secondary materials more extensively.
BMW's Raw Materials
BMW focuses its supply chain management on minimizing the use of 37 raw materials and raw material groups. Among them, it cites cobalt, natural rubber, copper, leather, tin, lithium, mica, aluminum, and nickel.
The BMW Group states that "As part of our Materials Strategy, we constantly analyze and pay special attention to raw materials that could be linked to potential breachesof environmental and social standards...For each material, the BMW Group not only implements standardized preventive and reactive measures but also applies its own specific measures."
What Is BMW's Most Popular Car Model?
BMW cites its sports sedan, the BMW 3 Series. The model was redesigned for 2023 with a redesigned kidney grille and front bumper and the addition of LED headlights.
What Steps Does BMW Take to Minimize Raw Materials?
BMW specifically cites its re-use of cobalt, lithium, and nickel from Chinese batteries. It indicates that it has "closed the loop" for reusing these materials for the first time and that this avoids the need for new raw materials.
Does BMW Offer Electric Vehicles?
BMW offers three fully-electric models as well as four hybrids. The fully-electric BMWs are the i4, iX, and i7. These models offer more than 300 miles of driving range.
The Bottom Line
BMW manufactures automobiles and motorcycles in 15 countries around the world. It's headquartered in Germany. It's also the parent company of the renowned Rolls-Royce brand.
Operating an enterprise of this scope requires reliance on a vast network of suppliers but BMW has taken decisive and aggressive steps to do so in a way that maintains social and environmental standards. It might be worth investing in one of its models if you share the company's goals.
