According to online sources BMW Group claims that it has more than 13,000 suppliers in the world. BMW increases the value of its inbound logistics by using low transportation costs and sourcing top-quality raw materials. As most manufacturing and assembly units have their headquarters in Germany or Europe, they made an effort to build trusting relationships with suppliers to cut down on logistics costs. The majority of BMW Company’s raw material comes from Germany (42.6%) and Eastern Europe (19.7%). This is because most manufacturing and assembly units are located in Europe. The company purchases raw materials from suppliers close to its headquarters in order to cut costs and ensure a consistent supply.
The following four business segments are part of BMW Group:
Automotive. This segment had a gross margin of 17.7% in 2015.
Motorcycles. In 2015, the gross profit margin for motorcycles was 22.5 percent.
Financial Services. This segment provides credit financing and leasing to BMW Group motorcycles and cars to retail customers. In 2015, the Gross Profit Marge in Financial Services was 13.3%.
Other entities. This segment earned EUR 211million profit before taxes in 2015. That’s EUR 57million more than the year prior.
BMW operates a complex manufacturing network with 30 sites across 14 countries. In January 2016, the company opened its newest engine plant in Shenyang in China. BMW Group has over 150 countries represented by its sales team.
BMW Group makes robotics a valuable part of its primary business activity. “Robots use a sealant on the doors that prevents water and sound from entering the car. This implantation does NOT aim to replace human workers. It is meant to aid them in their everyday tasks. BMW Group has been testing an assortment of autonomous vehicles in its factory floor as part of its automation drive. It is expected that this will reduce vehicle costs by approximately 5% each year.
BMW Group’s global distribution network consists of approximately 3,310 BMW and 1,550 MINI dealerships. China saw 60 BMW dealerships open in 2015. BMW i-comes with approximately 950 locations. About 63.1 percent of all new vehicles are shipped by rail from manufacturing plants. BMW Group has three distribution patterns for vehicles, from the assembly line to their final users.
