Analysis Of Bmw In Uk Market Economics Essay

Analysis Of Bmw In Uk Market Economics Essay Choose a company based in UK or another EU country, use micro and macro data to analyze the company and give recommendations based on previous analysis â€Å"This is to certify that the work I am submitting is my own. All external references and sources are clearly acknowledged and identified within the contents. I am aware of the University of Warwick regulation concerning plagiarism and collusion. No substantial part(s) of the work submitted here has also been submitted by me in other assessments for accredited courses of study, and I acknowledge that if this has been done an appropriate reduction in the mark I might otherwise have received will be made. Analysis of BMW in UK market 2007-2009 Introduction Headquartered in Munich, Germany, BMW Group is one of the leading auto manufacturers in the world. With three of the strongest premium brands in the car industry —BMW, MINI and Rolls-Royce, BMW targets at the high-end market. BMW (UK) is a subsidiary of BMW Group. Being t he third largest market for BMW Group worldwide, UK is the only country where all the three premium brands are presented (BMW UK Fact Sheet 2009). This essay intends to use micro and macro tools to analyze BMW’s sales volumes in UK from 2007 to Q3 2009, and to find out dominating factors accounting for changes in the company’s performance. Microeconomics Investigation mainly focuses on the influence of three determinants of demand. Macroeconomics Investigation selects five variables—GDP growth, VAT, interest rate, CPI inflation and average earnings for analysis, and also predicts BMW’s performance in the near future based on the tendency of macroeconomics environment. Finally, the essay gives three suggestions that the company can consider. Data in this essay is from BMW’s quarterly reports and Annual reports, UK Office for National Statistics, SMMT (The Society of Motor Manufacturers and Traders), fuel reports released by AA Public Affair and Infl ation Report issued by Bank of England. In addition, in order to provide updated information, references in this essay are mainly from authoritative newspaper and press, such as The Times, The Sunday Time and Times Online. I Sales Review Figure 1. BMW UK quarterly sales volume (Source: BMW Quarterly Reports and Annual Report 2007, 2008) Between 2007 and 2009, BMW has experienced great changes in sales volumes in UK market. From the graph, we can see that sales volume rose steadily in the first three quarters of 2007. However, it fluctuated and stood at 44,770 units in Q2 2008. Then a slump followed and sales volume reached a trough of 23,982 units at the end of 2008. Finally, the first three quarters in 2009 witnessed a recovery of sales volumes, which stayed at 39,039 units by the end of Q3 2009. Now, we’d like to analyze the reasons behind the changes in BMW’s sales volumes in UK based on the micro and macro investigation. II Microeconomics Investigation Determinants of demands played an important role in sales volumes. There are three determinants as follows: Price Elasticity According to John Sloman and Mark Sutcliffe (2004), determinants of price elasticity of demand are number and closeness of substitute goods and the proportion of income spent on the good.