In an interview with German magazine Automobilwoche, BMW’s Chief Executive Norbert Reithofer hints the automaker is ready to shift its policy from sales volumes to improving the pricing and earnings margins.
The German carmaker, the biggest premium auto company worldwide, has actually intentionally decreased its sales in the home country – Germany, where the pricing war is fierce – by several thousand units, according to the executive.
“We’ve been at the head of the premium segment for more than 10 years now. In terms of volume, we’re actually in the middle of thinking this through,” said Reithofer in the interview.
“We very much appreciate the fact that BMW is stepping ahead to stop chasing volumes at any price,” says ISI head of automotive research Arndt Ellinghorst in a note to clients.
According to the CEO, France and Spain have also fallen out of favor with the company due to the pricing competition mirroring Germany, and Ellinghorst forecasts BMW could take its earnings margin from 9.5% in the first quarter to 10% in 2015.
Meanwhile, BMW’s CEO predicts the automaker would be able to retain its top position among luxury manufacturers for at least two years, as the automaker is planning to continue its product expansion plan.