Will Electric cars fuel BMW’s continued growth?

BMW i, Interesting | December 23rd, 2015 by 4
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BMW is currently one of the most profitable automakers in the world, despite the fact that it moves a quarter of the volume of companies …

BMW is currently one of the most profitable automakers in the world, despite the fact that it moves a quarter of the volume of companies like Toyota and General Motors. BMW’s higher profit margins and increased niche vehicle lineup have kept BMW up in the higher echelons of the automotive industry for quite some time now. So it’s clear that BMW knows what it’s doing.

But it’s worth asking how long this will last. How long will BMW be able to keep its accelerate its sales while maintaining such high profit margins?

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With almost every possible niche filled and BMW having a car in almost every automotive segment imaginable, could BMW’s market possibly be getting close to saturation? There’s only so many cars coupe-like SUVs it can create to bring in more customers, so how long will these high sales volumes as profit margins last?

BMW could think about using its large wallet to buy another car company and use that to bring in some more revenue. However, that may be more difficult than it sounds. Its partnership with Britain’s Rover and Land Rover didn’t go over so well and it already has MINI and Rolls Royce to occupy both ends of the financial spectrum of buyers. MINI is the lower-end brand underneath BMW and Rolls Royce is the higher end brand. And with BMW’s seemingly infinite niches already filled, it seems as if BMW has the whole market covered. At least the current market.

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As the automobile pushes forward, new technologies keep popping up. Tech like electric mobility, autonomous driving and even hydrogen fuel-cells keep the industry booming. BMW’s extended foray into those technologies could keep its growth alive, especially in countries were EVs are highly sought after and markets are growing, like China. These new technologies could be what keeps BMW from stagnating. At least Professor Stefan Bratzel of the Center of Automotive Management in Bergisch Gladbach, Germany seems to think so.“BMW may be pretty close to capacity, but of course the company is thinking about growing further otherwise they will get into trouble from competitors. I think the new CEO Harald Krueger sees two big pillars of growth; electro-mobility and autonomous driving. The electric car will get more interesting for BMW and it is hoping the German government and others will push this issue further (with subsidies),”

We already know of BMW’s efforts in electric mobility, as it has an entire subdivision dedicated to such things. We also know that it’s working heavily on autonomous driving, as it already has many autonomous functions on non-US market BMW 7 Series‘. So BMW is already getting involved in these technologies and the more they grow, the more BMW will grow as a company.

As the i Division grows, with new models and body styles, BMW will bring in a ton of new customers, maybe even pulling some over from brands like Tesla. The BMW i3 has already proved it, as the majority of its buyers are first time BMW owners. Being that the i3 is the only affordable electric BMW at the moment, that’s pretty impressive and first-time customers will only increase substantially as new models debut.

[Source: Forbes]

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