BMW leaves production plans unchanged

BMW Group Thailand is still optimistic about business plans for production, sales and exports in 2020 despite difficulties from the latest coronavirus outbreak.

President Alexander Baraka said the group has yet to adjust plans because the epidemic’s duration cannot be predicted.

“This has been an uneasy situation for two months, but we are not pessimistic and are hoping this outbreak will end soon,” he said.

“The other positive factor is sales growth in January for three brands: BMW, Mini and BMW Motorrad.”

Mr Baraka said the premium car segment in 2020 will probably grow 2%, in line with the projection for passenger cars in the Thai market.

Uwe Quaas, managing director of BMW Group Manufacturing Thailand, which oversees its Rayong plant, said the facility had lower output during January and February because of production issues, not from the virus outbreak.

The production line is expected to be more stable in March, said Mr Quaas.

“We are sticking to our planned programme. Any adjustment comes from the central department of BMW, but the current plan has yet to be changed,” he said.

Mr Quaas said the Rayong site is very flexible in terms of production adjustment.

Yesterday BMW reported 12,954 BMW and Mini deliveries in 2019, a slight 1% dip from the previous year. But it was still an improvement on the overall market, which saw passenger car and premium car sales decline for the period to 529,477 (-3%) and 29,474 (-2%), respectively.

BMW sold 11,750 cars in 2019, a 2.4% drop, while Mini achieved an all-time high with deliveries of 1,204 cars, up 15% from 2018. This was the highest growth rate across Mini markets worldwide.

Mr Baraka said there were many challenges causing both domestic and global economic headwinds in 2019, such as the US-China trade tensions, the baht’s appreciation and bearish exports, all affecting the group’s performance.

In 2019, BMW Motorrad posted 1,650 motorcycles sold, a 23.4% drop from the year before. This was the first contraction for BMW Motorrad since entering the local market in 2009.

He said Thailand’s motorcycle market was significantly more competitive last year because of two main factors — new brands entering the market and beginning local assembly lines.

For the production in Rayong, BMW reported 31,944 units in 2019 of which 25,744 were cars and 6,200 were motorcycles.

Mr Quaas said BMW has produced more than 155,000 units at the Rayong site since beginning operations in 2000.

“Since 2004, more than 52,000 cars and motorcycles have been exported from Thailand to China, Malaysia, Vietnam, the Philippines and India,” he said. “Some 70% of motorcycle production and 58% of car output are for export.”

In 2019, BMW Financial Services Thailand reached an all-time high in new auto loans at 16.3 billion baht as well as outstanding loans at 50 billion baht in total, an increase of over 7% year-on-year.