Not even the ever vigilant auto industry was expecting the decline in European sales in 2012. As a result, it is being reported that many automakers have more stock than they are able to sell across the financially-stricken continent.
During a company event in Munich earlier this month, BMW Group board member and sales and marketing director, Ian Robertson, told reporters that, “Challenges in Europe are getting greater and the region faces a lot of bumps on the road before the situation in the continent stabilises. This could take many years,” Robertson said. It is therefore alleged that the German automaker has shifted “tens of thousands” of cars originally made for Europe to the USA and Asian markets where demand remains high.
In September, the EU recorded a total of 1 099 264 new car sales, or 11% less than in the same month in 2011. As of September 2012, the EU market has contracted by 7.6% compared to the same period in 2011. Britain was the only country to report an increase in sales, with Germany -11%, France -18%, Italy -26% and Spain down a staggering -37%. Despite this forecast, the BMW Group’s global sales increased by 14% in September with deliveries being boosted by 8.6%, reaching a total of 1.11 million units.
If the local BMW Rosslyn plant is anything to go by, BMW don’t just manufacturer cars and then hope to find buyers for them. Each car is built to satisfy an order that’s been made by a customer in America, Europe, China or wherever. It therefore stands to reason, that the cars Ian Robertson is talking about sending abroad to USA and China, haven’t actually been assembled yet.
The cars will be built to the specifications of their relevant local markets and, as in an complex manufacturing industry, automakers will not compromise overall profitability. A decision to such as this one, to shift production between markets, underlines the continued difficulties manufacturers are facing in debt-riddled and austerity-marked Europe, where consumer confidence and spending continue to decline.
We wondered if these reports would have any impact on the BMW Rosslyn plant and its 3 Series output, which is primarily dedicated for American export. Edward Makwana, Manager of Group Automotive Communications at BMW South Africa, had this to say:
Since our products are built-to-order, we don’t produce them on stock. It would not be possible to simply send cars that have already been produced for, as an example, Europe to the US, due to specific legal product requirements.
Our plants are able to produce a high number of different model variants, for example: right/left hand driven; diesel/petrol engines; four-wheel drive; high number of options; regional/market variants; etc.
This also applies to our Plant in Rosslyn, where we are able to produce all variants of the BMW 3 Series sedan for all markets. There are no changes for Plant Rosslyn as it is part of the international production network.
From this we can deduce that it’s business-as-usual for BMW South Africa and its Rosslyn plant, but there are certainly some difficult choices being made right now in BMW’s European manufacturing facilities.
