German manufacturers make financial and managerial decisions
27 September 2018
27 September 2018
Two of Germany’s largest automotive manufacturers have made big announcements concerning financial and managerial positions.
BMW has said it will not meet its full-year target of achieving a flat pre-tax profit, while Daimler has announced the replacement for current CEO Dieter Zetsche, who will be stepping down from his role as planned in 2019.
BMW’s statement suggests that the Bavarian company has lowered its profit margin guidance for cars, blaming intense price competition in the wake of the new WLTP emission rules. Its full-year pre-tax profit would moderately decrease, rather than remaining on par with last year’s level.
In a statement, the company said that it ′implemented the requirements of the WLTP regulations early. The industry-wide shift to the new WLTP test cycle has, however, led to significant supply distortions in several European markets and unexpected intense competition. Thanks to its flexible production and sales strategy, the BMW Group is responding to this increased competition and is reducing its volume planning to focus on earnings quality.’
The company also suggested that increased goodwill and warranty measures, together with continuing international trade conflicts, were other factors in the adjustment of its financial outlook for the year.
The news is similar to Daimler’s expectations for its Q3 results, with the German carmaker suggesting that profits would be down against expectations, due to the costs involved in getting vehicles through WLTP. Also, the need to pre-register some vehicles, or offer discounts to sell stock that had not cleared the new test procedure, was likely to affect profits too.
The Bavarian carmaker has also announced Andreas Wendt as the new Board of Management Member for Purchasing and Supplier Network, effective 1 October 2018. Wendt, a mechanical engineer, has been Director of the BMW Group’s largest German plant in Dingolfing, since early 2017. Before that, he managed the company’s Regensburg plant for eight years.
Wendt began his career at BMW Group in 2002, as head of Strategy Development Production. He then went on to manage Production ″Suspension and Drive Train Components″ for Plants Landshut, Dingolfing and Berlin. From May 2006 until moving to Regensburg, Wendt was director of the BMW Group’s largest engine plant in Steyr, Austria.
Meanwhile, Daimler has said it would appoint Ola Kaellenius as CEO next year to replace current chief executive Dieter Zetsche, who will be proposed as chairman in 2021 after a two-year transitional period.
Zetsche will step down from his positions on the board of management of Daimler, and as head of Mercedes-Benz Cars, effective at the end of the annual shareholders’ meeting in 2019, the company said in a statement.
Daimler’s current chairman, Manfred Bischoff, will recommend the election of Zetsche as his successor to take effect at the end of the annual meeting in 2021.
′As a long-standing member of the Board of Management and Chairman of the Board of Management, Dieter Zetsche has played a key role in shaping Daimler AG and has ensured its strategically outstanding positioning for the mobility of the future,’ said Bischoff. ′His expertise and experience are extremely valuable for our company. Dieter Zetsche is also predestined to lead the company’s Supervisory Board prudently and successfully. As Chairman of the Board of Management, he has proven that he can lead Daimler AG also in difficult circumstances and can inspire employees to pursue ambitious goals.’