After a largely subdued Geneva Auto Show 2017, BMW upped the ante at the Frankfurt Auto Show 2017 with a string of new launches. The new M5, X7 iPerformance Concept, i Vision Dynamics Concept, i3 Facelift, 6 Series GT, M8 GTE race-car and the Mini Electric Concept all made their official debut at the Frankfurt Motor Show.
After spending a couple of days at the event and coupled with all the recent news, here are five takeaways for BMW.
BMW’s Electrification Plans Explained
Following the lead of its rivals, Volkswagen Group and Mercedes-Benz, BMW announced its electrification plans at the Frankfurt Motor Show. As part of the program, the BMW Group will offer 25 electrified cars by 2025, with 12 of them to be pure-electric models. Interestingly, BMW’s M division and Rolls-Royce are also intended to make use of electric technology in the coming years. That said, the electric models confirmed for production at present are the i8 Roadster (2018), the X7 plug-in hybrid (2018), the electric MINI (2019), the production version of the i Vision Dynamics Concept, the electric X3 (2020) and the iNext (2021).
…But It Will Be Very Expensive
To finance the EV push, BMW is looking to considerably reduce its spending in areas like auto parts and indirect expenses. According to Bloomberg, the automaker is expecting to save $2.4 billion from car components alone. Additionally, the company is also aiming at heavy profits from its forthcoming upper-segment luxury models, such as the X7 and the 8 Series. All this will help it to maintain a healthy operating-profit margin.
It’s worth pointing out though that unlike Mercedes and Audi, BMW hasn’t yet expressed any intention to cut down on its research and development expenditure.
Moving Beyond Driving Pleasure
With the launch of the X7, BMW also announced a strategic marketing shift for the higher-end luxury models. As part of the move, the X7, the 7 Series, the upcoming 8 Series and the i8 will be marketed with an emphasis on technology, mobility and luxury, not performance and driving dynamics. Although controversial, market studies show a clear decline in the interest in driving among the youth and hence, BMW needs to go beyond its hallmark of “Sheer Driving Pleasure” to sustain a long-term customer base.
…But There Are Interesting Plans For BMW M
After the debut of the BMW M5 — which is the fastest accelerating BMW of all time with a 0-60 mph sprint of 3.2 seconds — BMW M boss, Frank Van Meel, has promised to make more hardcore vehicles for the enthusiasts. According to Van Meel, the M division will now have a four-level hierarchy — at the first level there will be the standard M models, followed by a Competition Package (currently available on the M3 and M4), then there will be the CS models (M4 CS) and finally, the track-oriented CSL range (it replaces the GTS variants — no SUV will gets the CSL badge).
While there is limited information regarding BMW M’s forthcoming models, this new hierarchy assures that more cars such as the beloved M3 CS, M4 GTS and the M4 CS will be made, which will greatly please the old-school BMW fans who have become a bit disillusioned with the M division recently.
Becoming More Approachable
Automotive executives are generally very conservative when dealing with the media, particularly in the case of BMW. However, the journalists and the millennials do not like that — they prefer individuals with an engaging character — like Elon Musk and Sergio Marchionne. While BMW will never allow its executives to reveal company’s plans on Twitter as Musk does so often, it needs its CEO, Harald Krueger, and other honchos to bond more with the press. This is why it roped in a German political journalist with no relation to automobiles for the IAA press event and allowed him to ask any sort of questions to Mr. Krueger — no matter how silly or aggressive they might be. The result was a more candid and enjoyable media event than usual.
Such a move won’t make the headlines or directly increase BMW’s sales, but it will enhance the company’s PR appeal — Tesla wouldn’t be as popular as it is today without the fun-loving persona (and of course, the brilliance) of Musk.