BMW, the German luxury car giant with sales nearly five times as large as Tesla Inc. (TSLA), commands a market cap of over $41 billion and holds more than a 10% market share in the U.S. high-end auto market. But BMW doesn't just produce high-quality performance vehicles out of thin air. It relies on an extensive and impressive supplier network to provide the inputs for final assembly.

Among about 40 main suppliers for its automotive production, some of the principal parts suppliers for BMW include Brembo, Thyssenkrupp, BorgWarner, Elringklinger, Bridgestone and Mahle.

Key Takeaways

  • BMW is one of the worlds largest high-end auto makers, with a global presence and a household name.
  • To become efficient on the global stage, BMW, like its competitors, relies on a complex network of suppliers for its cars.
  • While some suppliers have become integrated into the company itself, many still operate as third-party vendors under contract

A Brief History of BMW

Founded in 1916 and headquartered in Munich, Bayerische Motoren Werke AG, commonly known as BMW, is a German manufacturer of automobiles and motorcycles. BMW is also notably the parent company of the luxury Rolls-Royce brand. BMW is traded publicly on the Frankfurt Stock Exchange under the symbol BMW.

BMW manufactures, as of 2016, over 2 million cars and over 100,000 motorcycles annually. Along with Mercedes-Benz and Audi, it is considered one of the German big three manufacturers of luxury automobiles and is one of the biggest-selling luxury car makers worldwide.

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Expanding Market Segments

BMW has followed other automakers in pushing aggressively to expand sales in emerging markets, such as China and India. The company established auto manufacturing plants in both of those countries in the early 2000s. In 2014, BMW moved to access other important emerging market economies by establishing production plants in Brazil and Mexico. In pushing into emerging markets, BMW has primarily focused on establishing its own production and marketing its own brand rather than entering into strategic joint venture partnerships with existing automakers native to the country.

Supplier Networks

To manufacture its automobiles, BMW depends upon a network of over 100 auto parts suppliers from all over the globe, although approximately 50% of its suppliers are either located in Germany or are subsidiaries of German-based companies. Roughly another 35% of BMW's suppliers are headquartered in other European countries, with about a 50-50 split between Western European countries and Eastern European countries.

BMW has also emphasized consciousness of environmental issues and has developed sustainability guidelines for its suppliers. Examples include the guideline for use of recycled aluminum in parts and BMW's EfficientDynamics concept, developed to enhance fuel efficiency and reduce emissions. As of 2016, the company has featured in the Dow Jones Sustainability Index (DJSI) every year since 1999.

The following is a list of major automotive parts suppliers for BMW, along with the component parts that each supplies to the automaker:

  • Brembo: Brake calipers
  • Dräxlmaier Group: Interior panels
  • Peiker Acustic GmbH & Co.: High-speed mobile Internet for cars; In 2012, BMW became the first automaker to introduce this.
  • Thyssenkrupp: Steering columns, shock absorbers and suspension parts
  • BorgWarner: Drivetrain components, such as clutches and automatic transmissions
  • Elringklinger: Gaskets and exhaust system components
  • Mahle: Piston and cylinder components, valve train systems, and air and liquid management systems
  • Bridgestone: Tires
  • Guardian: Windshields and auto glass
  • GKN Driveline: Axle assemblies
  • Johnson Electric: Cooling and heating fan modules
  • Gestamp: Front and rear hood assemblies
  • Apag Elektronik AG: Interior lighting components
  • Delphi: Battery and electric vehicle charger components
  • Hirschvogel: Wheels
  • Magna: Body casting stampings
  • Harman/Kardon: Interior music and audio systems