BMW 2009 Annual Report Download - page 73

71 Group Management Report
The car scrappage scheme in Japan is due to be discon-
tinued
in spring 2010. At best, the market is only likely to
see a small improvement over the full year. Continued
growth is forecast for the emerging economies of India
and Brazil in 2010. In Russia, where demand for cars
halved in 2009, the market as a whole is forecast to stabi-
lise following the announcement that a scrappage scheme
will be introduced in 2010.
Motorcycle markets in 2010
Despite the first signs of an economic recovery, we do not
expect the international motorcycle markets in the 500 cc
plus class relevant for the BMW Group to make more than
a very modest recovery in 2010. The world market should
settle down at a level slightly higher than that of 2009.
The financial services market in 2010
The prospects for slightly improved economic conditions
are looking up worldwide. However, a rise in the number
of unemployed and the continuing use of short-time work-
ing arrangements are dampening consumer spending in
major sales markets.
The volatility of the international money and capital markets
has noticeably reduced. This, in turn, is resulting in better
conditions for providers of financial services. Now that credit
spreads have narrowed again, especially in the second
half
of 2009, fluctuation is expected to be less extreme in
2010.
Future inflation rate expectations are also a cause of uncer-
tainty
for the financial services sector. The monetary and
fiscal measures adopted in various parts of the world to
manage the economic and financial crisis could result in
first adjustments to the European Central Bank’s reference
interest rate during the second half of 2010. The US Reserve
Bank is expected to make a similar move at a later stage.
Interest rates in the medium-term maturity segment would
then change accordingly.
The process of consolidation at dealership level continues
unabated. Further bad debt losses in the sector cannot be
ruled out for 2010.
It is particularly difficult at present to predict how used car
markets will develop, given that influencing factors are
working to some extent in opposite directions. However,
now that prices for pre-owned cars have stabilised in
the USA, Canada and the United Kingdom, the situation
is also likely to settle down at a low level in Continental
Europe. Taking all factors into consideration, a rapid
re-
covery on international used car markets is unlikely in 2010.
Outlook for the BMW Group in 2010
The first encouraging signs are emerging to suggest that
the current economic crisis has passed its lowest point
and that the moderate recovery in global economic activity
seen in the second half of 2009 should continue. Growth
rates are, however, unlikely to reach the levels registered
in the years before the outbreak of the financial crisis in the
foreseeable future. Temporary setbacks could still arise
and it is still too early to assume that the recovery is sustain-
able. Taking all these factors into account, it is still difficult
to make reliable forecasts for 2010.
We have asserted our position well during this crisis-ridden
period. We began at an early stage to realign strategies
to enable us to meet the challenges created by a slump in
demand across key sales markets on the one hand and
problems stemming from the volatility of the international
financial and commodities markets on the other. At the
same time, we have kept on track with the Strategy Number
ONE
to realign the BMW Group despite the onset of
recessionary conditions. We have used the crisis conditions
prevailing in 2009 to strengthen the BMW Group by im-
proving efficiency through better use of resources, thereby
ensuring that the BMW Group will be able to perform well
both in 2010 and beyond. Moreover, the BMW Group con-
tinues to enjoy a solid liquidity base.
With effect from the beginning of the financial year 2010,
additional momentum for profitable growth will come from
our renewed and rejuvenated model range. We also ex-
pect to achieve significantly higher sales volumes in China.
The US market is likely to make further progress on the
road to recovery. The worldwide launch of the BMW X1
and
BMW 5 Series Gran Turismo was completed at the
beginning of 2010. These two innovative models open up
entirely new segments, a unique market selling point in
itself.
Customers and trade press alike have been ex-
tremely positive about the introduction of both models.
The Rolls-Royce Ghost will become available worldwide
over the course of 2010.
The new BMW 5 Series, one of the most successful models
in our range of vehicles, will be launched this spring. The
new 5 Series Sedan and the new 5 Series Touring (to be
launched before the end of 2010) will both help to boost
the competitiveness of our model range. The new model
has aroused a great deal of interest. The trade press has