With many manufacturers hedging a bet each way on their long-term objectives it was refreshing this week to hear BMW detail how it plans to keep up with a rapidly changing and highly volatile automotive market.
In line with its Strategy NUMBER ONE > NEXT, the BMW Group this week announced that it remains “firmly committed” to following its forward-looking strategy, despite the current challenging conditions.
“Our forward-looking approach has absolute priority,” Harald Krüger, Chairman of the Board of Management of BMW AG, said in Munich on Wednesday.
“Particularly in these volatile times, we are maintaining our focus on the future and taking the decisions that will lead to tomorrow’s success.”
BMW AG, Finance member Nicolas Peter that it was important the company set large but realistic goals if it was to remain a competitive market force.
“We remain an ambitious company, setting ourselves challenging targets. However, along with the rest of the industry, we are increasingly confronted with adverse external factors, the negative impact of which cannot be fully offset,” he said.
“We [are] unconditionally focused on the issues of crucial importance for the future, while at the same time optimising our internal processes,” he said.
So beneath all the corporate rhetoric, what does any of this actually mean for BMW moving forward? Well put simply the key changes involved targeted decisions and a huge investment in the electric sector.
Key strategic decisions to ensure future success
In recent months in particular, the BMW Group has taken numerous key strategic decisions to underpin its future success on a sustainable basis.
- The BMW Group is bolstering its global production network, focusing keenly on Europe, China and the USA. In September, the four-millionth vehicle was produced at the Spartanburg plant in the USA, the Group’s largest manufacturing facility worldwide.
- The BMW Group is currently investing in its Spartanburg plant on a substantial scale, preparing the plant for future generations of BMW X models and enlarging the local workforce from a current figure of around 10,000 employees to 11,000 employees by 2021. In addition to the 1,400 BMW X3, X4, X5 and X6 vehicles currently produced daily in Spartanburg, from December onwards the new BMW X7 is set to become the fifth BMW model to be manufactured at the South Carolina plant.
- A few weeks ago, the BMW Group also announced its intention to comprehensively expand its business in China. As the first foreign automobile manufacturer to take this step in China, the BMW Group has agreed with its local partner, Brilliance, to acquire a majority stake in the BMW Brilliance Automotive joint venture. At the same time, the contractual term of the joint venture is to be extended until 2040. Investments of more than three billion euros in local plant structures were announced in connection with this ground-breaking agreement. These measures strengthen the company’s position in China, a dynamic growth market.
Rigorous expansion of electric mobility
With the launch of the BMW i3, the BMW Group established itself early as a pioneer in the field of electric mobility and by 2021, the BMW Group will have five all-electric models:
- the BMW i3
- the MINI Electric
- the BMW iX3
- the BMW i4
- the BMW iNEXT.
By 2025, that number is set to grow to at least twelve models. Including plug-in hybrids – whose electrically powered range will increase significantly in the coming year – the BMW Group’s electrified product portfolio will then comprise at least 25 models.
This wide range is possible thanks to highly flexible vehicle architectures and an equally flexible global production system. Going forward, the BMW Group will be capable of manufacturing models with all-electric (BEV), hybrid-electric (PHEV) and conventional (ICE) drivetrains on a single production line.
The goal for the current year is to deliver 140,000 electrified vehicles to customers. By the end of 2019, the BMW Group expects to have more than half a million electrified vehicles on the roads.