BMW Chief Hits the Roadshow Circuit

BMW Chief Hits the Roadshow Circuit

By Michelle Krebs February 4, 2008

Norbert Reithofer will this week become the first chief executive of BMW to go on an investor roadshow as the German automaker seeks to deflect worries about its profitability and shed its reputation as an industry laggard, the Financial Times reported over the weekend.

Reithofer will visit London on Wednesday as well as New York and Boston on Thursday and Friday to update investors on his efforts to cut costs.

The paper noted these visits mark a cultural break for the German carmaker, which until now only made its chief financial officer or other lower-ranking executives available to its shareholders.

The Financial Times reported Arndt Ellinghorst, analyst at Credit Suisse, as saying: “BMW’s management has been hiding away for a year and a half. They’d better have something interesting to say.”

BMW has said it wants to cut costs by the equivalent of $8.8 billion in the next five years, and reduce its workforce by 8,000 from today’s 107,000 employees.

Reithofer is likely to face pointed questions about the company's sagging margins compared with its resurgent main rival, Mercedes, the London paper noted. Mercedes’ return on sales in the third quarter was 9.5 percent compared with BMW’s 5.4 percent.

BMW has focused on boosting sales volumes by rapidly increasing its number of models (including the X6 crossover unveiled at the recent Detroit auto show) -– a move that has drawn some criticism -– and by offering aggressive incentives. However, the company has been accused of neglecting profitability and becoming complacent about its rivals.

Michelle Krebs:  is Editor-in-Chief of AutoObserver.com. Follow @AutoObserver on Twitter.