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BMW to build 1.5 million units of new modular engine a year

News | March 25th, 2010 by 8
reithofer

Another day and a new forecasting report from BMW. In a discussion with the Automotive News journalists, BMW’s CEO Norbert Reithofer gave a glance into …

Another day and a new forecasting report from BMW. In a discussion with the Automotive News journalists, BMW’s CEO Norbert Reithofer gave a glance into the brand’s future.

BMW is developing a new family of modular gasoline and diesel engines, including the company’s first three-cylinder unit similar to the diesel unit which debuted in the Vision Concept last year.

The new engines are said to power over 1.5 million vehicles every year, a new landmark for BMW, 200,000 units more than the total global sales for BMW Group.

BMW to build 1.5 million units of new modular engine a year

Once again, the BMW front-wheel drive architecture comes back in play since some of these three and four cylinder engines will power the new, already controversial, vehicles.

The rear-wheel drive models will take advantage of these powerplants as well.

While no deadline has been set for the optimistic goal, Reithofer said that BMW aims to sell 2 million vehicles a year within the Group by 2020.

Since FWD BMWs remains one of the main topics in the BMW world these days, Reithofer states the new architecture will underpin 700,000 to 1 million cars a year starting in 2014 or 2015.

As mentioned before, the MINI brand will first take advantage of this architecture starting with its third iteration due to launch in 2014.

BMW’s Head of Development, Klaus Draeger, said the new architecture will be seen in a range of vehicles that are between 3800mm and 4300mm long.

According to Automotive News, Reithofer said the BMW brand will offer more than one FWD model, but he declined to share any details “because then Mr. Winterkorn knows it as well,” he said referring to Volkswagen AG CEO Martin Winterkorn.

The demand of a FWD BMW is driven by the growing demand for smaller, more fuel-efficient cars, a need also governed by the tougher CO2 emission rules that will roll out in 2012.

Citing some marketing reports, Reithofer said “We expect the premium small-car segment to grow by 4 percent to 6 percent annually until 2020,” an area that can not be ignored by any premium automaker.

Reithofer and Automotive News also provided a justification for this highly controversial decision of producing FWD cars:

The decision to create a new joint architecture is also a sign of the times. Automakers are under increasing pressure to share investments between brands or with partners to save money.

Reithofer said the decision to solely develop a new architecture was the best solution for BMW.

“We will have to ask the question: What can we do on our own to create economies of scale? Once we have built our own modular platforms, we can approach others and ask them to participate,” he said.

Time are changing and this move, while unpopular, could turn out to be a great move by BMW. In the end, several years ago, we went through a similar state when BMW announced their entrance into the SUV market, a move that turned out to be very beneficial for BMW. Porsche has done it as well…..

[Source: Automotive News ]

  • Gig

    What sadness!!!

    No, I beg you, NOOOOOOOOOOOOO

    1er has to remain RD

    • InvincibleM5

      What?? It will be a RWD car…

      Norbert Reithofer = “This research has helped us to be confident that BMW can build front-drive cars in a new market segment. But the next 1-series, when it is launched in 18 months or so, will be rear-wheel drive, as will all the future variants.”

      Just that I think the FWD must be the city or they call it as Urban car, and some other future small cars but already stated up there, the next 1er will be RWD and so to all other future variant which I think except for the city and urban.

      http://www.bmwblog.com/2010/03/25/bmw-ceo-ready-for-front-drive/#comments

  • james may

    gig if you ran bmw they would still only making bikes and would be owned by diamler get with the programe. bmw has to make more use of the mini platform and that car has to short of wheel base to be rwd

  • Plamen

    I don’t want to believe this…it’s all about money…

  • Dennis

    The numbers don’t seem to add up. Mr. Reithofer said that the new platform will underpin 700k to 1m cars in 2014. But by then the total group production should be around 1.5-1.7m. So about half of the production will be city vehicles with FWD? Doesn’t seem likely. It looks like some of the traditional models will jump in the FWD wagon, possibly the 1 and 3 series and the bigger models will be RWD and 4WD.

  • EMPOWER

    cant people read and make sense of what they are reading. they intend to let other car companies make use of the platform derr. most likely peugeot. Dennis BMW would never make the 1 and 3 fwd. BMW will have 3 main platforms. the fwd mini platform, the one which will under pin the 1 and 3 and then the one used by the 5 and 7. And yes it is about making money they are a business after all derr

    • Simba

      Sorry, but I don’t see how this can be a sound justification for the BMW brand to build front wheel drive cars. .

      Firstly, just to get one thing straight, Norbert explicitly stated that they will be making BMW FWD cars (not cars/brands with the BMW Group) and that this situation is the same as the decision back in the days when they decided to enter the SUV market. To me, it is very clear that they will be making FWD cars with a BMW badge on it.

      In this case I want to ask the company this, as a current customer, potential future customer, a fan and a person who admires the company and what it stands for and its achievements:

      1. How do you justify the fact that you have been correctly marketing your cars for the past 50 years as the best handling due to the traditional BMW values of RWD, 50/50 weight distribution that is present in all BMWs?

      2. If you are going to launch BMWs with FWD, are you aware of the damage this will cause to the brand as a traditional RWD, good handling brand? Don’t tell me you can make good handling FWD cars, any idoit will be able to tell you that RWD is better!

      3. You will not be able to bank on your COMPETITIVE ADVANTAGE of RWD characteristics to market the brand anymore. You cannot tell me that RWD is good becasue your 0 Series is FWD – are you then telling me that all BMWs except the 0 Series provides perfect handling? i.e. not all BMWs are good to drive – well, not Audi’s are great to drive, but the R8 is (I suppose) So what’s the difference between Audi and BMW? Is that what you like people to see your brand?

      4. There is a big difference between the SUV situation and the current situation. Building an SUV did not conflict with the brand image of BMW. In this case, taking away (and actually trashing) one of the core values that the brand is built on is not as simple as launching SUV or Boat division.

      5. You are highly upsetting the customers and the public!!! (Just check the reactions on the internet)! One of the mainreasons for buying a BMW is the values that the brand holds – its exclusivity, brand values, individuality etc. This will take a deep knock. BMW’s brand image will not be as exclusive anymore.

      6. If you are saying the FWD is also acceptable, then why should a customer not buy Audi’s then? BMW is going the same route anyway! BMW is DEGRADING itself to that level. What a SHAME!

      7. IF you have been marketing yourself as better than the others due to RWD, you don’t (if you are sensible) now turn around and do the exact opposite and say to the customers it’s also good. If you don’t think it is as good, why produce in the first place? PROFITS??? I will then ask if you think it is sustainable! Profits come from being exceptional, inferiority is NOT exceptional. Look at Toyota – HOW BORING!

      8. The main reason that the CEO gave was to cut cost by achieving economies of scale. Well, yes, you are saying all the key words that will please a shareholder! But will these please the customers and the general public? I don’t think so! And guess what, shareholders get NOTHING without the customers, and a brand is all about the customers and the public. BMW didn’t become a brand that is one of the most admired byfocusing on cost cutting strategies, or else VW and Audi would become one of the most admired companies.

      9. There used to be a video on BMW USA’s website about the BMW’s culture and believes. Amongst other things, it highlighted protecting ideas, producing the best, 50/50 weight distribution, not designing for the lowest common denominator…. all these were marketing as being BMW’s culture. I think BMW can trash that video now because BMW culture is NO MORE!

      10. What happened to the attitude of producing the best? Would BMW sacrifice quality and superiority for lower costs? It seems like it is doing that at the moment with these decisions. Will I see a VW engine in a BMW one day? just like Audi? They are cheap and cost efficient to manufacture, would BMW consider outsourcing from VW as well then?

      11. Yes, in the short term, people will buy these products because of the brand image that BMW created over the years.

      12. In the long term, the brand and its culture will be destroyed! There would be less of a difference between BMW, Audi and Lexus. They would all just become pure profit dominated businesses. Sales will also drop for BMW as there is erosion of competitive advantages. But by that time, the current management team would have been gone and they would have all received their relatively short term performance awards. The next team would be there to deal with the degraded brand image.

      What I do hope is that BMW is making a seperate brand for this FWD thing and that they are saying this to misguide competitors. The only reason management would use the BMW brand to make these FWD things is to boost short term sales (maybe their own performance evaluation time range), AT THE EXPENSE OF LONG TERM BRAND SALES AND IMAGE DAMAGE! I think the management team needs to look at the word PREMIUM again as it is what the BMW Group is based on. BMW is not Toyota, VW or Kia.. these are subpremium brand – all about cost cutting. BMW should be about innovation, best, investment.

      WHAT A SAD DAY FOR THIS GREAT BRAND. To the video that they posted up on BMW culture – tradition my foot, BMW culture my foot, Premium and independence my foot! BMW has just become a “TYPICAL AUTO MANUFACTURER”. $$$$$$$$$ To the shareholders: Are your performance measures too short term, motivating managers to make such decisions?

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