BMW Sales Impress as EU Falters

During BMW’s first quarter:

Group revenues totalled € 17,546 million (2012: € 18,293 million; -4.1%).

And:

Group net profit came in at € 1,312 million (2012: € 1,352 million; -3.0%). The total number of BMW, MINI and Rolls-Royce brand vehicles delivered to customers worldwide in the first three months of 2013 rose by 5.3% to 448,200 units (2012: 425,528 units).

While some observers might consider the financial drops to be evidence the company has trouble, the fact that BMW’s home market is Europe should set aside such worries, particularly because it did not fail there. In context, that means BMW did not falter in Europe the way that firms like Volkswagen, General Motors Co. (NYSE: GM) and Ford Motor Co. (NYSE: F) have.

The BMW Group improved its position in practically all regions of the world during the first quarter. Sales volume increases in Europe (207,243 units; +3.1%), the Americas (96,488 units; +5.0%) and Asia (130,219 units; +9.5%) all contributed to evenly balanced growth for the BMW Group.

The U.S. market has surged in the first quarter, and BMW’s Europe sales improvement nearly match those in the American market.

There could be several explanations for the BMW results. Among them are that wealthy buyers have not had income drops during the recession like those of the middle or lower classes. Another is that BMW has remarkable brand loyalty. There is evidence of this in brand valuation studies. The leader of this sort of research — BrandZ — puts BMW’s brand value at $26.4 billion. That is well above the brand value of the world’s number two car company, Toyota Motor Corp. (NYSE: TM). Compared to the Japanese company, BMW is a niche manufacturer. And not a single U.S. car brand is in the BrandZ top 100 global brands.

Brand loyalty will always remain a mystery. Does the public’s positive impression of a brand come before strong sales, or do strong sales come before strong brand valuation? Many BMW shareholders do not care. Their company has unprecedented advantages.