Retail vehicle delivery data*
In December 2019, BMW Group was informed by the SEC that the SEC had commenced an inquiry into BMW Group’s vehicle sales and sales reporting practices. On January 22, 2020, the SEC formally opened an investigation into potential violations of U.S. securities laws by BMW Group relating to disclosures regarding BMW Group’s unit sales of new vehicles. On September 24, 2020, BMW AG and two of its U.S. subsidiaries settled the matter with the SEC and, without admitting or denying the allegations, consented to the entry of an order (the “SEC Order”) finding violations of Sections 17(a)(2) and 17(a)(3) of the U.S. Securities Act and agreed to pay a penalty of U.S.$18 million. The SEC Order alleged, among other things, that the disclosures that BMW Group had provided to investors in its U. S. bond offerings conducted under Rule 144A in the period from 2016 to 2019 had contained material misstatements and omissions regarding BMW Group’s U. S. retail vehicle deliveries.
In connection with the above, BMW Group reviewed prior period retail vehicle delivery data for automobiles and determined that certain vehicle deliveries of automobiles were not reported in the correct periods. BMW Group has corrected its reported delivery data, as further described below, to report deliveries in the period in which they occurred and has made, and will continue to make in the future, certain adjustments to its policies and procedures (together, the “Revised Reporting Process”) in order to further improve the reliability and validity of its retail vehicle delivery data, in particular with respect to the timing of the recognition of retail vehicle deliveries.
BMW Group has applied the Revised Reporting Process to all markets with effect from the year 2020. While BMW Group revised retail vehicle delivery data for certain of its most significant markets for the years 2016 through 2019 presented in this report, such data were not revised for BMW Group’s other markets. As a result, retail vehicle delivery data presented in this report for the years 2016 through 2019 is not directly comparable to such data presented for the year 2020. Specifically, the retail vehicle delivery data for automobiles presented in this report have been revised as follows:
When presenting total retail vehicle delivery data for automobiles other than model-by-model data, data relating to the years 2016 through 2019 for BMW Group’s 16 most significant markets were adjusted to reflect the Revised Reporting Process. In the years 2016 through 2019, these 16 markets represented on average approximately 87% of BMW Group’s total retail deliveries of automobiles. For each of the years 2016 through 2019, these revisions amounted to less than 1% of BMW Group’s total retail deliveries of automobiles.
The retail vehicle delivery data for automobiles for BMW Group’s other markets have not been adjusted for any period prior to 2020, nor have any retail vehicle delivery data for motorcycles been adjusted for any period prior to 2020. BMW Group believes the impact on BMW Group’s retail vehicle delivery data presented in this report of such data not having been adjusted to reflect the Revised Reporting Process to be immaterial.
The preparation of BMW Group’s retail vehicle delivery data involves a variety of estimates and judgments, some of which are complex and all of which are inherently subjective, and is subject to other uncertainties, including:
- The vast majority of deliveries of vehicles are carried out by independent dealerships or other third parties, and BMW Group is reliant on such third parties to correctly report relevant data to BMW Group.
- The definition of deliveries includes vehicles delivered in the United States and Canada if the relevant dealers designate such vehicles as service loaner vehicles or demonstrator vehicles.
- Retail vehicle delivery data for periods prior to 2020 include an immaterial number of pre-series vehicles that were never intended to be sold to end users (such as vehicles for use by government agencies in connection with safety evaluations (e. g., crash tests) or for other tests).
BMW Group believes the retail vehicle delivery data presented in this report are materially correct in accordance with BMW Group’s current definition and related policies and procedures of retail vehicle deliveries.
Retail vehicle deliveries during a given reporting period do not correlate directly to the revenue that BMW Group recognizes in respect of such reporting period.
*See Glossary for the definition of deliveries.