BMW 2002 Annual Report Download - page 21

001 BMW Group in figures
004 Report of the Supervisory Board
008 Supervisory Board
011 Board of Management
012 Group Management Report
031 BMW Stock
034 Corporate Governance
042 Group Financial Statements
106 BMW AG Financial Statements
112 BMW Group Annual Comparison
114 BMW Group Locations
116 Glossary
120 Index
20
Further expansion of customer-orientated
sales and production processes
The BMW Groups production network is charac-
terised by agility, the ability to respond quickly and
flexibly within a changing framework. In 2002, the
customer-orientated sales and production process
(KOVP) was further expanded and implemented, for
example at the Spartanburg plant for the start of
production of the new BMW Z4. Together with an
online ordering system, the KOVP allows a further
reduction of the internal processing time. A large
number of customers and dealers use this facility to
individually configure and change the specification
of the vehicles already within the production sys-
tems right up to the start of the actual production
process. Up to 120,000 changes are processed
each month on a worldwide basis.
Project-related cooperation agreements
As well as expanding its own production network,
the BMW Group is also making increased use of
external resources by links with business partners.
The BMW Group is focusing on a number of spe-
cific project-related partnerships. In 2002, agree-
ment was reached with PSA Peugeot Citroën for
the development of small petrol engines which will
be used in future versions of the MINI cars. Other
partnerships are in place, for instance, with Toyota
(diesel engines for the MINI brand cars) and Magna
Steyr Fahrzeugtechnik in Graz (BMW X3).
Capital expenditure increased significantly
In 2002, the BMW Group invested euro 3,184 million
in property, plant and equipment and intangible
assets. In addition, euro 858 million of expenditure
for development have been recognised as assets in
accordance with IAS , so that total capital expenditure
amounted to euro 4,042 million. This 15.0% total
increase in capital expenditure compared to the pre-
vious year, reflects the fact that the BMW Group is
now in the decisive phase of the implementation of
its product and market offensive.
Including development costs recognised as
assets, the investment rate (i.e. capital expenditure
as a percentage of group revenues), increased in
2002 to 9.6% and is thus above the highest pre-
viously recorded ratio of 9.1% in 2001.
In 2002, the BMW Group invested particularly
in comprehensive modifications and extensions at
the Dingolfing plant, where production of the new
BMW 5 Series will commence in 2003. At the same
time, there was on-going capital expenditure for
expansion and further technological improvements
at the other BMW Group manufacturing plants.
By investing heavily in 2002 and 2003, the
BMW Group is establishing the foundation for future
growth and for the Groups success in the coming
years. In particular, in the Automobiles segment the
BMW Group is making considerable efforts in prepar-
ing the launch of new models and ensuring that the
BMW Group maintains its technological and innova-
tive lead. In addition, resources are being invested
to expand production capacity and extend market
presence.
As in past years, the BMW Group financed capi-
tal expenditure entirely out of cash flow. The latter
increased in 2002 by 4.1% to euro 4,374 million.
Extensive preparation for new models
Research and development activities of the BMW
Group in 2002 were dominated by the implemen-
tation of the product and market offensive. Extensive
preparations were made for new models, some al-
ready launched in 2002 and others being launched
in the course of 2003 and 2004.
Production of four new products started in 2002,
the BMW Z4, the BMW 7 Series long wheelbase ver-
sion, the
MINI Cooper S and preparation of the series
production of the Rolls-Royce Phantom. The BMW
Z4 represents the first time, by means of continuous
process optimisation, that a product has been devel-
oped through to the series stage in only 30 months.
Two diesel versions of the BMW 7 Series were
also successfully launched.Two newly developed