By Katherine Clarkson
Desperate times call for creative measures when it comes to surviving the global downturn – like luxury car makers teaming up to buy tyres and parts in bulk.
BMW has announced it will expand its joint purchasing with Daimler’s Mercedes-Benz division as one of its measures to cut spending.
By joining forces to buy tyres, electronic components and other parts, the two luxury car giants are generating savings of 8-15%, according to Herbert Diess, BMW’s purchasing chief.
The number of parts being bought together was in the “double-digit” range, and would be limited to 5% of the roughly 10,000 components in their vehicles.
Norbert Reithofer, CEO of BMW, announced at the company’s annual news conference in Munich, that sales will fall this year as global vehicle markets shrink 10-20%.
He said that co-operation with other car makers will take place “whenever necessary and reasonable,” however, he emphasised that BMW intends to maintain its independence, and “size is not everything.”
Vehicle makers in Europe are likely to build 25% fewer vehicles this year as markets decline, the European Automobile Manufacturers Association said on March 5. BMW’s profit dropped 89% last year as the car maker spent money eliminating jobs and set aside cash in case car buyers default on loans.