Mercedes-Benz and BMW, regarded as bywords for German luxury brands, posted similar sales in Korea last year, but their financial strategies diverged. Benz piled up cash in light of various management variables, including changes to its domestic sales method, while BMW increased vehicle inventory to maximize sales volume.
According to last year's audit reports released by each company on the 21st, sales at Benz Korea and BMW Korea were 6.1883 trillion won and 6.0955 trillion won, respectively. That was up 8.8% and 1.7% from a year earlier.
Although the two companies' sales were similar in size, the amounts of cash and inventory assets filling their coffers showed a big gap.
Benz Korea increased its cash holdings. Last year, Benz Korea's cash and cash equivalents stood at 266 billion won. Even excluding 114.3 billion won in corporate tax refunded by the tax authorities, the figure comes to 121.7 billion won. That is more than double the previous year's 57 billion won.
Inventory declined. Benz Korea's inventory assets increased by 339.3 billion won in 2024 from a year earlier, but fell by 133.9 billion won last year. In particular, vehicle inventory dropped 27% to 732.5 billion won from 996.6 billion won.
A Benz Korea official said, "Last year, as sales expanded around top-tier vehicles such as the AMG models and the G-Class, vehicle inventory decreased." The official added, "With more cash on hand and lower inventory assets, it has become easier to respond to various management variables and market conditions."
By contrast, BMW Korea's inventory assets increased 12% from 1.5044 trillion won in 2024 to 1.6794 trillion won last year. Of that, vehicle inventory rose 73% to 805.1 billion won. Instead, BMW's cash and cash equivalents last year were 379 billion won, down 15% from a year earlier. That is because it purchased a large number of vehicles from headquarters to boost domestic inventory.
A BMW Korea official said, "In the past, there were times when we could not respond to sales immediately due to a lack of inventory," and explained, "To prevent shortages this year, we secured inventory in advance from headquarters at the end of last year."
The split in Benz and BMW's financial strategies appears to stem from the different situations the two companies face in this year's domestic imported car market.
On the 13th, Benz introduced "Retail of the Future (RoF)," making sweeping changes to its domestic sales method. Instead of wholesaling inventory to dealers, Benz Korea manages inventory directly and sells at a single nationwide price. As dealer-by-dealer discount competition disappears, the industry expects Benz Korea's sales volume could decline for the time being. BMW Korea is in a position to seize this opportunity to boost performance.
Meanwhile, according to the Korea Automobile Importers & Distributors Association (KAIDA), first-quarter sales this year put BMW Korea at 19,368 units, ahead of Benz Korea's 15,862. Ahead of BMW Korea is Tesla Korea, with 20,964 units. Last year, BMW Korea sold 77,127 units, overtaking Benz Korea's 68,467 to take the No. 1 spot among imported car brands.