Need Stimulus Like The Scrapping Bonus

2023 Author: Eric Donovan | [email protected]. Last modified: 2023-08-25 09:36

BMW Motorrrad had to accept a minus of 18 percent in the first quarter. In an interview with Autogazette, motorcycle boss Hendrik von Kuenheim talks about dwindling markets, sales expectations for 2009 and the terrible word discount.

The global financial and economic crisis has also hit BMW's motorcycle division. In the first quarter of this year, the company was only able to sell 17,232 machines. Compared to the same period of the previous year, a decrease of 18 percent. “We do not yet have the April figures from overseas, but this month has not turned the trend. We still have a double-digit minus,”said BMW motorcycle boss Hendrik von Kuenheim in an interview with Autogazette.

Slump in the home market

The slump in sales on the home market of Germany was particularly drastic at around 35 percent. «The German motorcycle market has been moving downwards for years. There is no such development in any other European market. Especially among young people, the motorcycle is in competition with many other activities,”said von Kuenheim.

April did not change the trend

Autogazette: Mr. von Kuenheim, the sales crisis has now hit BMW-Motorrad too. In the first quarter you had to accept a decrease of 18 percent with 17,323 motorcycles sold. Did the all-important April turn the trend around?

Hendrik von Kuenheim: No. We do not yet have the April figures from overseas, but this month has not turned the trend. We still have a double digit minus.

Autogazette: In December you didn't want to hear about the crisis. Did you misjudge the market development?

Kuenheim:Nobody was able to correctly assess the effects of the financial and economic crisis, I have always emphasized that. Even now, I don't trust myself to predict when it will end. But things are going better in some markets, for example overseas. In the USA we have a special

boom … Autogazette: … which, however, is at a low level…

Kuenheim: … yes, but if you are slightly in the plus and the market is at the same time falling by an average of 30 percent or more, then that's one thing phenomenal performance.

Driving license is exorbitantly expensive

Autogazette: You were hit particularly hard by the slump in southern Europe, otherwise a guarantee for good sales figures.

Kuenheim: Indeed. In Spain, for example, the overall market for machines over 500 cc has collapsed by 78 percent. And Spain is the third largest motorcycle market after Italy and Germany.

Autogazette: In Germany, BMW's minus is around 35 percent. Is this drastic decline in the home market particularly painful?

Kuenheim: The German motorcycle market has been moving down for years. There is no such development in any other European market. Especially among young people, the motorcycle is in competition with many other activities.

Autogazette:Perhaps riding a motorcycle has just become too expensive, which starts with the driver's license.

Kuenheim: Sure, it's exorbitantly expensive. You have to spend between 1500 and 2000 euros for this, depending on the region. In Portugal, you can do that for a tenth of the money. Motorcycling in Germany is made unnecessarily difficult by the legislature and the driving school associations.

Tax number over 90,000 units

Autogazette: In the previous year you were able to sell almost 102,000 motorcycles, which corresponds to a minus of 0.8 percent compared to 2007. What do you expect this year ?

Kuenheim: I'm an optimist, for me the glass is always half full. After the first three months of the year, I assume that there will be sunshine again at some point. I hope that the minus at the end of the year will only be twelve to 14 percent.

Autogazette: So you are calculating with sales of around 90,000 units?

Kuenheim: We are currently heading for a number of just over 90,000 units.

Autogazette:Due to the slump in sales, you are sending the employees at the BMW motorcycle factory in Berlin-Spandau on short-time work from May 26th to 29th. Is this week enough to face the crisis?

Kuenheim: It's difficult to judge from today's perspective. But we already planned continuous closings for the summer and autumn holidays in January. They will certainly take a lot of pressure off the production side. And we use the time to carry out renovation and maintenance work.

No plans for downsizing

Autogazette: You employ 2000 people in Berlin. Are their jobs safe?

Kuenheim: There are currently no plans to cut jobs. The intelligent combination of flexibility instruments (working time models, time accounts, forward-looking vacation planning, short-time work) gives us enough leeway to actively manage market fluctuations in the further course of the year.

Autogazette: Do employees have to be prepared for wage cuts if the sales crisis persists ?

Kuenheim:Our board of directors, our managers and all employees share in the company's success - in good times and in bad times. Therefore a board member has to forego around 40 percent of his annual income this year. It is around a third for a division manager and around 10 percent for a collective bargaining employee.

Autogazette: So you have to worry about your bonus too?

Kuenheim: I know that I don't get a bonus - and that's okay too.

Need a stimulus like the scrapping bonus

Autogazette: The scrapping premium has boosted sales in the auto industry. Would that be a means that would also help the motorcycle industry?

Kuenheim: Of course, such a stimulus would also be helpful for the motorcycle industry. I would like to see something suitable for the two-wheeler industry too.

Autogazette: You are also President of the World Association of International Motorcycle Manufacturers IMMA. Why is the industry so reluctant to ask for government aid?

Kuenheim:In Germany maybe 20,000 people earn money with the motorcycle industry and generate around double-digit billions. But compared to the automotive industry, that looks modest, but our industry also needs a stronger voice. BMW Motorrad also wants to contribute to this.

The supplier industry is down

Autogazette: In December, your colleague Stefan Pierer from KTM criticized the fact that the medium-sized economy was being dried up by a lack of credit. Has the situation changed?

Kuenheim: Unfortunately not. The supplier industry is down. Small and medium-sized companies suffer even more than the big ones. At BMW Motorrad, for example, we had to cope with several supplier failures at short notice.

Autogazette: So your criticism is directed at banks that do not provide small and medium- sized enterprises with sufficient capital?

Kuenheim:In a functioning economic cycle everyone fulfills their tasks - from the manufacturer to the banks to the end customer. I can only urge the banks to provide the economy with the capital it needs. This is the only way to keep the economy going. Almost every day I hear the complaints of retailers that they are not getting enough money from the banks. The middle class is the backbone of our economy, and banks must also be aware of this.

I think the word discount is terrible

Autogazette: Sales of your bestseller, the R 1200 GS, have plummeted by around 40 percent. Are you worried about boosting sales with discounts?

Kuenheim: After the model revision at the beginning of 2008, the R 1200 GS reached its all-time high in sales, the current decline has to do with the situation in the main sales markets. Of course you think about how you can improve sales again. But I think the word discount is terrible, something like that is not productive for the BMW Motorrad brand. We have very good ideas on how we can boost sales without discounts.

Autogazette: The trend in the two-wheeler industry is clearly towards scooters. Do you suffer from the fact that neither BMW nor your daughter Husqvarna can offer something like this?

Kuenheim: We are monitoring the trend very closely. But the scooter market is so competitive that most southern European manufacturers move irons from left to right without anything getting stuck in the end. It's hard to make money in this segment. If we think we can make money with it, we will serve the market with appropriate models.

Do not provide any information about new products

Autogazette: From when do you mean that, from 2010?

Kuenheim: It takes three years to develop such a product.

Autogazette: But it was not just today that you realized that such a product could be interesting.

Kuenheim: I've only been with

us for a year and four months … Autogazette: … but you too had a predecessor who observed the market and did a good job.

Kuenheim: He did an excellent job. But we do not make any statements about possible new products.

Autogazette: What about a new edition of the C1? Have you already made a decision?

Kuenheim:A few days ago I saw a used C1 with a mileage of 4,000 kilometers at a BMW dealer for 6,400 euros. The C1 cost 9,900 German marks when it was launched. It is remarkable that a product that was not particularly loved by the trade press and hardly found buyers in some markets now costs more used than new. It's a strong statement, but a decision is still pending.

Frank Mertens conducted the interview with Hendrik von Kuenheim