BMW CEO Plans ‘Big Push’ in Models to Fend Off Audi, Mercedes

News | September 8th, 2010 by 18
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According to a Bloomberg report published today by BusinessWeek, BMW Group intends to expand the current range of BMW and MINI models in order to …

According to a Bloomberg report published today by BusinessWeek, BMW Group intends to expand the current range of BMW and MINI models in order to increase yearly sales with 55% over the next ten years. BMW Group is aiming thus at preventing its main competitors, VW Group or Daimler AG from becoming leaders in the industry.

The expansion of the current models range is just one of the strategies underlined in BMW Group’s plan of development.

Others include the product line extension, the focus on the small car segment, the expansion of the MINI brand, collaboration with others in terms of sharing the technology and power plants, and not ultimately, the focus on the Chinese market.

Let’s take these strategies one by one and see how they develop into actions.

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Additional production capacities.  BMW Group envisages the need of a new factory or the expansion of the existing facilities in order to support this future capacity growth. BMW Group’s plans for the long run include a sales target of more than 2 million cars in 2020, compared to 1.29 million in 2009.

As BMW CEO Norbert Reithofer said in an interview: “The big push in new models, entering new segments comes after 2012 […] If I look forward to 2020, then we have to think about additional capacity.”

BMW is currently using 90% of the capacity of its Europe-based plants, according to a report issued by IHS Automotive. At the same time, the European-based plants of its competitors are running at 77% (Volkswagen) and 73%, respectively (Daimler).

Expanded range of products. BMW plans to broaden the 6-Series line by adding a four-door version. The plans include also the expansion of the MINI model lines, with at least three new models in the works (Roadster and Coupe versions, plus the MINI Countryman) and the development of an urban car, battery-powered.

Going to the competitors’ side, Audi’s plans include the launch of a dozen models this year (A1 and A7 sportback included), and a line-up expansion of up to 42 vehicles by 2015 (from 34 in 2009).

Mercedes-Benz is also thinking of expanding its offer in the compact cars segment, with the help of French carmaker Renault SA, and electric cars for China.

Introducing new technologies. It is already well-known the intention of BMW Group to introduce the front-wheel-drive to the BMW and MINI family of products, in the compact segment.

Sharing technologies and powerplants In order to cut costs, BMW Group has constantly increased the number of parts shared between different car models. To achieve more savings, BMW is considering now selling its smaller engines to third parties.  BMW CEO recently said that “We’re also open to sharing our engine tool-kit system with a potential partner, but at the lower end rather than the six cylinders.”

Also, the Bavarian carmaker will continue its partnership with PSA Peugeot Citroen, which involves co-developing new four-cylinder gasoline engines, that will power the MINI vehicles after 2015.

Growing in China . BMW sales recorded an impressive growth in China, which has thus become BMW Group’s third biggest country, after US and its home-country, Germany. The growth rates on these markets are very different: while BMW sales in US increased by 10% in July this year, in China the increase was around 82%. Therefore, given the fact that US is a key market to BMW Group, and also the fact that China’s economy shows signs of slowdown, BMW aims at balancing these markets in the future, in terms of growth.

BMW Group is confident that all these actions will lead to increased sales and prevent competitors like Audi or Mercedes-Benz to takeover the lead in the top of premium carmakers.

BMW sales forecast indicate at least 1.4 million vehicles produced for the year 2010. In support for this high sales target, BMW CEO brings some clear evidence: the fact that the new 5-Series is sold-out, and that increased demand for the X1 model led to the add of a third shift in the Leipzig plant.

Its competitors have also increased their sales expectations: Mercedes is targeting a “double-digit” sales increase in 2010 (sales figure in 2009 was of 1.09 million cars). For the same year 2010 Audi targets a sales volume of more than 1.08 million cars.

[Source: Bloomberg via BusinessWeek]

18 responses to “BMW CEO Plans ‘Big Push’ in Models to Fend Off Audi, Mercedes”

  1. Tom says:

    Please don’t become another Toyota.

  2. Tom says:

    Nice story about how BMW deals with an aging workforce.

  3. badger says:

    Bring back 4 cylinder engines PLEASE

  4. Giom says:

    Some bitter sweet stuff if you ask me…

    Cutting 4 billion in purchases sounds like going al cheapo on us, but I have faith. BMW isn’t new at this and they know how to – not only survive, but stay on top. If it means ruffling some feathers – including mine – then, so be it.

    A lot of comments about BMW becoming another Toyota, GM etc. is going around, but this is the last thing to worry about. I have not seen another car company with as clear a goals as BMW. AND they’re very far sighted – others like Toyota and GM just isn’t.

    I have faith!

  5. bob says:

    Reithofer is not “CEO”. He is Chairman of the Board of Managment (“Vorstand”). There’s a difference…

  6. M says:

    bmw is forcing some techs on us…RFTs will deter many to Audis and Mercs

    • I agree that I’m not a fan of the RFTs but I doubt it will be enough to heavily sway someone making a $40k+ purchase enough to change up the type of car they’re buying. My guess is BMW is also betting on this idea.

  7. 1Mc says:

    GJ BMW, they know they have to keep re-inventing, finding new segments, above all keep competing.

    It’s too easy for a company to withdraw behind it’s own marketing and say, we’re not going to try to compete, we’re exclusive – we’ll just keep doing what we’re doing.

    Looking forward to seeing what BMW bring to the table in the next few years and as long as they keep funding M – we’ll always have more hardcore little bimmers to lust after! Bet the 2014 1M is going to be a phenomenon!

  8. Wooo hoo. says:

    First off, stop peddaling to those below middle class. There’s a brand image to protect, and seeing irresponsible teenagers and “Joe Dirts” driving these around…. reduce production and boost the price while adding cutting edge tech for those of us that can afford ownership of a (once) exclusive brand.

    The brand just doesn’t attract envy like it used to, and it’s sad…

    • 1Mc says:

      If you buy BMWs to make people envious then you are a sad, pathetic man.

      Basically you have the desire to be a Ferrari or AM driver, but aren’t successful enough. That’s why you’re here whining about your BMW’s image.

    • Daniel Hoang says:

      BMW was not suppose to be a car for Wealthy Executives. Think about the 2002, the original 3 and 5 series. The brand should only for car enthusiests. People who enjoy driving and willing to have some fun with there car deserve and nice sporty car like BMW. This is why the term ” Ultamate Driving Machine” was coin. BMW is best known for its superior handling and preformance which was praised by many people who did more than to commute in the car.

      “Cutting edge technology” the the killer of BMW. All these safety and Assist tech in BMW, Benz, and Audi are just making drivers more careless. The only Technology BMW should invest on is its engine and the handling components like the suspension.

      I think Its all right to have the prices reduced a little bit, but the cars need to be a pure “Ultimate Driving Machine” than just another luxury car.

    • Artmic says:

      haha hahaha, fucking ha.
      I got a 335 last year not because i wanted to show off, i got it because it is a fun drive around town. If i wanted to show off, i wouldn’t pick a BMW, i’d go for a Bentley.

  9. Auday says:

    this is the beginning of the end IMO.
    Historically speaking this is the point where great companies (or even empires in history) get rolling momentum from their excessive success and start expanding beyond their limits, ending up losing focus and compromising the quality of the core that took them to that success.

  10. jocamryn says:

    I can’t wait for the new 6er 4 door to be unveiled. That thing is going to be sweet!

  11. Artmic says:

    The only thing i worry about in regards to cars in general is the idiotic global warming fanaticism. Pretty soon, all M cars will have a 6 cylinder turbo engines…….. and the non M versions of the cars will be powered by twin turbo 4’s.

    What is next BMW? Electric cars that pollute the world with the batteries inside them?

  12. BMfan says:

    Is the Porshe Panamera sweet? 6-series should just be as it is but maybe its because I love coupes. Its BMW so I believe it will still look and drive good.

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