At the Geneva Motor Show 2010, BMW unveiled their latest generation BMW 5 Series Sedan and also, the ActiveHybrid 5 Concept, a prelude to the production model. To learn more about the new 5 Series, we sat down for an interview with Christian Schulte, Product Manager 5 Series and Daniel Schmidt, responsible for communication on the 5 Series.
BMWBLOG: What is the message that BMW is bringing to the Geneva Motor Show?
Christian Schulte: If you look around here at the Geneva motor show, BMW is focusing the communication on design, aesthetics, because it’s the purchase reason number one for all cars, and especially important for BMW customers. Customers are looking for: beautiful cars, really emotional cars – that’s always been BMW assets,essence. The brand’s core is Joy, and emotion is what we want to evoke in our customers. And that’s also why we focused here all the communication, all the pictures and the future sales, on the very well balanced proportions and design.
BMWBLOG: What is the typical 5 Series customer? We have seen a lot of people jumping from a 3 to a 5 Series. Have you seen any customers moving from a 7 Series to a 5 Series model?
Christian Schulte: Typical customer for 5 Series – well, it’s a global car, so we have a typical customer in the US, another typical customer in Germany, but to simplify, up to now, in Europe it’s a male – late 40s, early 50s. He/she is a professional, traveling long distances, on the Autobahn – it’s a professional tool (our note: the 5 Series) to do his job.
Nevertheless, in US we have a quite high female share – it is one of the highest female demographic shares in the worl. So, this car is also appealing to female customers, which makes me very happy, because design, sportiness – this gives us the proof that we’re really doing the right things with the design.
BMWBLOG: And to go back to the E60 model, would you see a faster adoption rate of the new 5 Series? A lot of people classify the F10 5 Series as being a safer design, more appealing at the first glance when compared to the old one.
Christian Schulte: We did a market research with this car in the US and Germany, and we got the highest rate of people saying: “Yes, that’s our car, we like this car”, and we had a very very low rejection rate…. So we do not see any rejection reasons for the new car.
BMWBLOG: And the customer survey – was it more positive towards the interior design or the exterior?
Christian Schulte: I think these work together. When people approach a car, they look at it from the outside, and they say: “Wow, look at the wheels, the proportions, the lines and the hood” and then they go to the interior, and they say, “wow, it’s also the interior quality that is pretty amazing”, and then take a picture of the interior quality because all the materials inside are derived from the 7 Series – you see the same quality, wood, leather, the accent trim on the dashboard also comes from the 7 Series and the 5 Series GT. So I think that they work closely together, but for sure it’s the exterior design which is moving/leading them to the purchase decision.
BMWBLOG: You mentioned the 5 GT. Would you see an overlap with some of the customers? They’re two different cars, but as far as interior luxury they are at close levels. Would you see customers moving from the 5 GT to the 5 Series and vice-versa or they are just two different types of customers?
Christian Schulte: From the naming, we have the 5 Series family, so we can make specific offers for customers that, for example, in the 5 Series sedan need more space in the rear; I think you have experienced the 5 GT, it’s exceptional, different environment, offers much more room than the 5 Series sedan. So, for sure, there are movements from 5 Series sedan to 5 Series GT and all the way back, but we think it’s pretty much positioned in a different corner: the 5 Series sedan is a classical, business sedan, while the 5 Series GT is a new offer for people seeking more interior luxury and space.
BMWBLOG: What are the sales projection for the second half of this year?
Christian Schulte: Usually we don’t release any specific sales figures, but if you look at the predecessor of this car, we think that this car may even exceed the predecessor’s volumes.
BMWBLOG: Would you say the car fits the profile of the JOY campaign? This has seen a huge push from BMW lately and it seems to be focusing more on the X1 and smaller cars.
Christian Schulte: We have two aspects in the JOY campaign: One is aesthetics, and the other is the emotional state of the brand, so we’re playing on these two pillars and for sure the 5 Series is playing more on the aesthetics and design , while the X1 and the 1 Series and the Coupe and Convertible playing on the emotional one, so I think the offers fit very well together.
Daniel Schmidt: Actually the 5 Series Sedan is the core competency of the company, it combines almost everything the BMW brand stands for, and of course the JOY campaign is almost perfectly fitting to this car.
BMWBLOG: Let’s focus on the competitors for a moment. Which would be the closest competitor to the 5 Series? Clearly, Mercedes-Benz E Series has been a classic competitor, but would you see Audi A6 as the most important contender at this stage? Or would the E-Class still remain the main one?
Christian Schulte: If you look at the competitive environment, for sure we have the well known competitors: E-Class, Audi A6 – the A6 is already an old model, at the end of the life-cycle, so let’s see what will happen next year. So I think it’s not for us to define the competition, but for the others to define their competition and you know where they’re heading at the moment, and we’ll have the leading business sedan of the world and the others trying to follow us and to keep the pace.
BMWBLOG: Can you please tell us the reasons/business case behind the hybrid project? Why is BMW bringing a 5 hybrid at this early stage?
Christian Schulte: I think we have to differentiate between unveiling and market launch. We have two interesting hybrids at the moment – the X6 and the 7 Series, and for us it was important to show our competence and say “Yes, for sure there will be a 5 Series hybrid, we are capable of doing this, and we’re moving forward, we’re not staying with the top of the range program, but moving down also to the 5 Series”.
Daniel Schmidt: Technology is developing fast, also on our side – this is a next generation, based on a six cylinder, not 8 cylinder as in the 7er, and it’s a full hybrid. So our development in terms of hybrid technology is fast and therefore, of course, we are aiming to bring it as soon as possible.
BMWBLOG: What is the primarily market for the 5 Series?
Christian Schimdt: Every third 5 Series sedan is sold in the US, and then we have with 17% Germany, UK, European markets. Overall, we say one third US, another third Europe and last third Asia and the rest of the world.
BMWBLOG. Since you mentioned US, in 2012, the new emission regulations will go in play. Why are there no immediate plans to bring a 5 Series diesel to the US?
Christian: It’s because the market still needs to get used to it, to get ready; we are collecting now the experiences with the 3 Series and the X5, we have a good reception nevertheless; I would also say that diesel is not the volume engine. Also, if you look at the competition, the share is really below 10%, and if you aim to reduce your carbon footprint in the US, you have to attack the petrol engine. So here is what we are doing; we have a 528i which is one of the most efficient engines in the competition – the others do not offer this kind of engine in the range, and we bring the 8-gear transmission, also for a reduction of 10-15%, for 90% of the volume ..hence… a lot more than offering a special diesel model.
BMWBLOG: As far as efficiency though, we are looking at the 5 Hybrid and its only 10% fuel savings. So the obvious question: why only 10%? It is still perceived as a low number by the general automotive consumer.
Christian: We don’t think it’s a low number. I think 10% is a huge step to achieve, if you look at the level we’ve already achieved, because in 2007, Dr. Reithofer said “today, we start the new efficient dynamics in 2007”, already the E60 made a 10% stepdown. Today we have a new level with the new 5 Series, and from that, already 10%. So for sure the competitors, who are on a higher level in CO2 emissions, can market higher digit savings…
Daniel Schmidt: In one sentence: you cannot neglect physics. Physics is all what we’re showing here. And at the end of the day, there is a certain potential, but there’s also a need and necessity for stiffness of the car, for pedestrian safety, for body structure, which is increasing at the same time. So on the one hand, we have to increase stability, chassis stiffness, and all this kind of stuff but in the same time reduces fuel consumption, and in the same time – so in a triangle – increase the power output. And we do all this. So we don’t feel that 10% for example is a low number, especially if you have a relation or relative basis which was already very good, the best in the segment.
That’s our message – best in segment, and for the base model, for the sedan car, and for the ActiveHybrid – the best of hybrids. We call it ActiveHybrid because it has to be the best performing and the best dynamic car in the segment, and at the same time using the hybrid technology, which is very sophisticated.
BMWBLOG: How would you define the new 5 Series in just a few sentences?
Daniel Schmidt: I would say that the general key messages about the 5 Series – base model – is as Christian said, the aesthetics, we really believe that our designers and engineers created a very attractive and appealing car, and the most appealing business sedan in the segment, and secondly, in terms of driving dynamics it is a true BMW, and it has superior driving dynamics, riding quality, handling, and in the same time we enhanced comfort, by far. As you know, we had some complaints in the past: that the car is very good in terms of dynamics, but maybe not perfect in terms of comfort, and I think we believe that through the new chassis and the new options like adaptive drive, we could achieve both: on the one hand, be the best in driving dynamics, and at the same time, improve by far the comfort of the car, and the best efficiency.
Christian Schulte: I think that’s pretty important, I think that efficiency is for the US customers – we’re making a huge step in the US regarding efficiency. We have a two-digits reduction in CO2 emissions, because we have a worldwide roll out of all the measures. We still remain BMW, we’re the most agile car in the market, but we add our EfficientDynamics approach also for the US, and that’s a big step forward.
Daniel Schmidt: …and visible for the customers in the US – brake energy regeneration.
BMWBLOG: Out of topic subject. Starting with the the BMW X1, we’ve seen more and more social media and online marketing efforts from BMW, especially around Facebook and now Twitter. Is there anything planned for the 5 Series to somehow reach those customers that spend more of their time online?
Christian Schulte: I think we started already with the live webcast press conference of the new 5 Series when we had one of the highest online shares and hits…
Daniel Schmidt: Actually, the highest of all times. On the launch date November 23rd, it was really unbelievably good, and if you “Google or Youtube” for the new 5 Series Sedan, you will find several movies, so we are kind of preparing more material for online, and the marketing aspect is important.
Christian Schulte: Also, in marketing for sure you cannot skip completely the traditional channels like TV, in the US, or print media in Germany, and out-of-home communication, but the online is considered important – a 98% share – that’s the figure from last year – this year, all 100% of all 5 Series users have for sure Internet access and for us the internet is a very good channel to spread the information, because that’s what customers are interested in: technology, innovation, and they’re getting the information more and more on the internet.
BMWBLOG: Especially seen in the young executives demographic, up to 35 years old; they tend to spend a lot of time online and those mediums, first of all they’re free to promote, and are easily measurable as well. While if you do a lot of offline promoting, it might be hard to see the return on investment right there.
BMWBLOG: Please allow us to end with a question close to our home. Is the 5 Series still the “Ultimate Driving Machine”? Is that slogan still valid?
Daniel Schmidt: Sure it is. Without a doubt. BMW will never compromise on this. It is in our genes. That’s why we say EfficientDynamics. ActiveHybrid.
Christian Schulte: We don’t want to lose our heritage and the Driving Machine, that’s important to keep, to remain the Ultimate Driving Machine, but to add all the other features like: efficiency and comfort. Even if the American customers want the most “driving machine”, they also like comfort.
BMWBLOG: Duly noted. Thank you for the interview.