BMW competitors

Competitor analysis of BMW

BMW defines its competitors as companies that can provide the same products or competing in the same market.  Audi and Mercedes-Benz are the main competitors of BMW and lie in the same strategy group. Moreover, all these three auto companies are considered high-end brands and target customers who have strong demand in luxury car field

➢ Main competitors

Audi

Audi that is the subsidiary company of Volkswagen Group ranks the third place in global luxury car brands sales ranking and became a strong competitor for BMW. The current objective of Audi is to transit to produce various vehicles that include advanced technologies such as electric drives and digital services and sustainable development concept that can meet customer’s future needs. In addition, expanding China’s market would be their main strategy. Audi plans to invest EUR 14 billion from 2019 to 2023 in electric mobility, digital service and autonomous driving , which may create both strengths and weaknesses for the company. In terms of strength, with the development of technological and the trend of sustainability, electric car gradually became the mainstream of the market. The second main advantage of Audi is leading technology systems by constantly focusing on research and development (R&D) field . However, in regard to Audi’s weaknesses, the frequent vehicle recalls could be a negative impact for Audi’s customer loyalty. For example, in May 2017, Audi Australia recalled Q5 series due to panoramic sunroof seep water. Therefore, emphasizing the reliable quality of productions to customers would be a smart strategy for BMW to gain competitive advantage over Audi.


Mercedes-Benz

The strongest competitor of BMW is Mercedes-Benz, which is a division of Daimler AG. The main strategy of Mercedes is to follow their long-term sustainability strategy and effective sustainability management to remain it’s leading position in the global premium segment Furthermore, the objective of Mercedes is to achieve their production operations flexible, digital, and sustainable goals that Mercedes plans to achieve within next decade.

 R&D ability helps Mercedes to remain leading position in competition, and Mercedes invested EUR 8.7 billion in FY2017 to innovate and develop their products, which is much more than BMW’s investment (EUR 6.1billion) and Audi’s investment (EUR 3.8 billion ) in the same year. In other words, Mercedes can engage more quickly in currently rapid-developing technological trends to satisfy customer’s demands. The second strength of Mercedes is high liquidity position. Its current ratio was 1.2 in FY2017, which is higher than BMW’s 1.0 current ratio . The high liquidity position indicated that the company might be able to obtain funding easily and consequently catch more opportunities and face risks more agile than BMW did. The main weakness of Mercedes is constant recall, which is same as Audi’s weakness mentioned above. It is reported that, in June 2018, carmaker Daimler recalled 774,000 vehicles resulting from founding illegal software that masks diesel emissions. Also, in 2017, Daimler recalled 75,000 Mercedes-Benz cars due to the risk of fire in the UK . Frequently recall can negatively contribute to their brand image. Furthermore, using illegal software masked diesel emission seriously violated sustainability that is company’s significant strategy. 

 

Overall, from BMW’s perspective, it is necessary to maintain relatively reliable products quality to win in the market, and at the same time, putting more effort on sustainable development and R&D field could be the core competitiveness for BMW


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