Currently in Europe, many companies are struggling with the debt crises in Spain, Italy, and Greece, and they are seemingly paralyzed to make the big moves and decisions that are necessary in global business. One of the bigger auto companies out of Europe, Germany’s BMW, has had a strong year so far despite the rough and uncertain European economy.
While many corporations struggle in the debt-stricken European economy, BMW’s executives and workforce has managed to “power a 14 percent gain in third-quarter profit that beat analyst expectations,” according to Dorothee Tschampa at the San Francisco Chronicle.
“We expect our attractive product line to generate positive momentum” as the company moves into what they believe will be a very profitable 2013, said BMW’s CFO Friedrich Eichiner.
Eichiner is confident his plan to provide strong external markets with BMWs luxury cars will continue to propel BMW forward. He hopes to focus on China, where he believes BMW can increase sales by over 10 percent. He likely has the support of the rest of management and shareholders because the stock has grown over 20 percent in the last year.
As a CFO in such a volatile home market, Eichiner has had to work in a less than ideal situation, but he has made the best of what he could. BMW is performing well ahead of competitors Audi and Daimler. Fourth quarter predictions are believed to be even better than the third quarter, and we’ll know that information soon.
Eichiner has appeared to make the right decisions in almost every situation during his time at BMW. He is having BMW invest 200 million Euros (259 million dollars) into a car assembly plant in Brazil, showing signs that BMW will also be targeting the Latin American market.
It looks like Eichiner is countering economic troubles at home in Europe, so he is expanding and aggressively pursuing foreign markets. This may be the safest course for any large European corporation at this time. After the first quarter of 2013 ends, numbers will be out for BMW. We’ll be able to see how well Eichiner’s strategy is performing and whether emerging markets can deliver the profits BMW needs to continue their stellar success. Here’s hoping that BMW’s fortune isn’t changed by the uncertainties of the European economy.
Do you think BMW is on the right track to weather the European economic uncertainty?