BMW

vs.

MERCEDES BENZ

By, Amogha Abbur Bidoura Chakraborty Deepak C N Dilip K Kajari Ghosh

AUTOMOTIVE INDUSTRY PROFILE

•History•Auto motive market•Crisis •Strategies

Automotive market in India

•Its history•Major players in the market•Crisis in India

COMPANY PROFILE- MERCEDES BENZ

Mercedes-Benz : German manufacturer Division of parent company : Daimler AG CEO – Dieter Zetsche

Origin : Mercedes-Benz has it’s origins in Karl Benz's creation. The Mercedes automobile was first marketed in 1901 by

Daimler. Merger between Karl Benz and Daimler in 1926.

VISION AND MISSION OF MERCEDES BENZ

VISION:

• To be more successful• To meet the demand for future mobility• To create everlasting value for our share holders,

customers, work force and society in general

MISSION:

•To give our best for customers.

QUALITY & PRODUCTION

Quality Mercedes-Benz had a reputation for its quality and durability. J.D.Power surveys demonstrated a downturn in reputation in

this during the late 1990s and early 2000s. Mercedes showed dramatic improvement by shifting from

25th to 5 th place. It also received the Platinum Plant Quality Award for it’s

Mercedes’ Sindelfingen, Germany assembly plant.  Along with it’s native Germany, Mercedes – Benz cars are

also produced in the following countries:- Argentina, Austria, Bosnia &Herzegovina, Brazil, Canada, China, Egypt,USA,etc.

Mercedes-Benz’s Product Portfolio includes, Passenger Cars, Sports Cars, Electric Vehicles, Concept Models, Buses, Vans, Trucks & Bicycles.

INNOVATIONS & ACHIEVEMENTS The internal combustion automobile, honeycomb radiator.

The first passenger road car to have brakes on all four wheels (1924).

Traction control system, airbags, pre-tensioners in s-class

In September 2003, Mercedes-Benz introduced the world's first 7-speed automatic transmission called 7G-Tronic.

Mercedes-Benz pioneered a system to detect an imminent crash and prepares the car's safety systems to respond optimally.

Mercedes Benz developed a fatigue-detection system, known as Attention Assist

Mercedes Benz invented the adaptive high beam assist system

Half a century of vehicle safety innovation helped win Mercedes- Benz the Safety Awards at the 2007.

COMPANY PROFILE - BMW Bayerische Motoren Werke AG (BMW) is a German automobile,

motorcycle and engine manufacturing company. BMW is known for its performance and luxury vehicles.

Bayerische Motoren Werke G.m.b.H. came into existence in 1917. Having been founded in 1916 as Bayerische Flugzeugwerke AG (BFW), it became Bayerische Motoren Werke Aktiengesellschaft (BMW AG) in 1918.

The dominating shareholder of the BMW Aktiengesellschaft since 1959 is the Quandt family, which owns about 46% of the stock. The rest is in public float.

BMW’s arch-rival in the premium car segment in USA and Europe is Daimler Chrysler’s Mercedes Car Group. Other main competitors of BMW in Western Europe include Volkswagen , General Motors (Opel, Saab, Vauxhall), Porsche, Renault, Toyota (Lexus) etc.

Models include, 1series, 3series, 5series, 6series, 7series, X1, X3, X5, X6, Z4, M3, M5, M6, X5 M, X6 M, ActiveHybrid X6, ActiveHybrid 7.

INNOVATIONS & FINANCIAL ANALYSIS Hydrogen – H2R (1 and 2) Hydrogen Combustion Engine V10 engine Variable Twin Turbo Diesel Straight-six petrol engine xDrive all-wheel-drive system MINI Convertible soft top system Seven-speed SMG transmission

net income dropped 74% to €78 million in third quarter 2009 compared to €298 million in 2008.

 Although revenue figures (€11.8 billion) wereas predicted, net income was below predictions by about €150 million. 

This factor is further accelerated by governmental programs throughout the third quarter that emphasized small car makers. Also seen was a drastic drop in the net profits of BMW from 3134 Million Euros in 2007 to 330 Million Euros in 2008(the drop was 89.5%).

VISION & MISSION STATEMENT

BMW’s Vision is - Uniqueness through diversity, Leadership, taking Risk, courteous.

BMW’s Mission Statement is - "To become the most successful premium manufacturer in the car industry"

Toyo

ta

Gener

al M

otor

s

volk

swag

enFo

rd

Honda

Merce

des

Fiat

BMW

0

1000000

2000000

3000000

4000000

5000000

6000000

7000000

8000000

9000000

10000000

9237780

8282803

6517288

5407000

3912700

2174299

2524325

1439918

2008

COMPARATIVE ANALYSIS OF BMW AND MERCEDES BENZ

Toyo

ta

Gener

al M

otor

s

volk

swag

enBMW

Honda

Merce

des

-15.00%

-10.00%

-5.00%

0.00%

5.00%

10.00%

15.00%

5%

13%

9%

2%

5%

3%

13.30%

11.90%

9.30%

2.10%

5.60%

3.10%

8%

-11%

3%

-7%

0%

4%

20072008change in Prod.

COMPARATIVE STUDY OF MARKET SHARE OF COMPANIES

2006 2007 200842000

44000

46000

48000

50000

52000

54000

56000

58000

48999

56018

53197

51280

52430

47772

Revenues of BMW in Euro Millionrevenues of Mercedes cars in Euro Million

REVENUE LINES OF MERCEDES BENZ AND BMW

MERCEDES BENZ : TREND ANALYSIS

1982 1983 1984 1985 1986 1987 1988 1989 1990 19910

0.5

1

1.5

2

2.5

0.951.03

1.14

1.71.8 1.8 1.68 1.7 1.7

1.8

1.167 1.18291.2337

1.376

1.552 1.5811.667 1.709

1.8461.978

Actual net income of Mercedes Benz in DM bil-lionExpected net income of Mercedes Benz in DM billion

BMW : TREND ANALYSIS

2004 2005 2006 2007 20080

0.5

1

1.5

2

2.5

3

3.5

2.242

2.239

2.87

3.13

0.33

2.232 2.2

1.169

2.073 2.112

Actual net income of BMW in euro billionExpected net income of BMW in Euro billion

2004 2005 2006 2007 20080

10

20

30

40

50

60

44.346.6

48.9

56.01853.197

2.242 2.239 2.87 3.130.330000000000001

sales of BMW in euro billion

Actual net income of BMW in euro billion

REGRESSION TRENDS OF BMW

Bxy=2.5377Byx=.13328

Coefficient of correlation,r=0.5815

Type of correlation : Moderate

CORRELATION TRENDS OF MERCEDES BENZ

Bxy=46.619Byx=0.01446

Coefficient of correlation,r=0.8211

Type of correlation : High

SWOT ANALYSIS OF MERCEDES BENZ

Strengths•Reputation for quality and durability•Became synonyms for prestige and excellence•Continuous improvement in quality•Joint ventures with companies to introduce hybrid fuel efficient model

Weakness

•Performance over fuel efficiency.•Faces competition in terms of technology from other brands like BMW s. •Costly German production base

Opportunities

•Expansion of European union large market block opened.•Underexplored Asian markets.

Threat•Other big companies in the line manufacturing same products.•Rising price of raw materials.•Fuel prices and small car manufacturers•New entries

SWOT ANALYSIS OF BMW

Strengths•Intelligent cars(the technology and the artificial intelligence that they provide with the cars•Security•Customer relationship•High adaptability production

Weakness•Heavy cost German based production unit•Maintain its German engineering excellence still get cost competitiveness

Opportunities•Expansion of European union•Underexplored Asian markets

Threats•Other big birds in the line manufacturing same product line•Rising price of raw materials•Fuel prices and small car manufacturers•New entrants

COMPETITORS OF BMW AND MERCEDES BENZ

Toyota General Motors

volkswagen BMW Honda Mercedes

-15.00%

-10.00%

-5.00%

0.00%

5.00%

10.00%

15.00%

5%

13%

9%

2% 5% 3%

13.30%11.90%

9.30%

2.10%

5.60%

3.10%

8%

-11%

3%

-7%

0%

4%

20072008change in Prod.

•Niche market enjoyed by the luxury car makers

•Effect of economic downturn

•R & D is the key for survival of any company

•The new concepts introduced :

The use of new materials Light-weight structures Mechatronics Communication technologies Efficient Dynamics

OUR LEARNINGS AND CONCLUSIONS

• Extensive quality control

• Excellent customer relationship

• Extensive use of information systems