Last week, Chairman of the Board of Management of BMW AG Harald Krüger used his first quarter results conference call to confirm BMW's plans for the rest of 2017 and beyond. He reiterated that the company will continue to take the long view and will be aggressive in meeting its multiple goals of increased sales, higher profits, and lower fleetwide emissions through an expanded lineup, electric mobility, cleaner internal combustion engines, and autonomous vehicles.
Krüger described his near-term strategy as "going on the offensive." In this case, the "offensive" means releasing 20 new or refreshed models in 2017, and another 20 next year. It's not just about cars, either. BMW Motorrad will launch fourteen new two-wheeled models this year as well.
The boss usually takes every opportunity to talk about BMW's long-term vision, which the company calls Strategy Number One>Next. Not only does this include advancements in vehicles, but also speeding up production and internal processes and improving services to customers. The goal, according to Krüger, remains, "to be the technology and innovation leader in mobility."
All this takes money, and to make more money, the BMW Group has set goals for higher profits before tax—which it is achieving—and record sales—which it is also achieving so far in 2017. A subset of increased sales is the company's goal to sell 100,000 electrified vehicles this year. After the first quarter of 2017, Krüger says they are on track.
BMW, BMW Motorrad, and Mini posted best-ever first quarter sales this year. For the first time, the BMW brand delivered more than 500,000 vehicles in a single quarter.
Twice as many BMW i and iPerformance models went out the door during the first quarter this year as opposed to 2016. Electrified vehicles now constitute more than 3 percent of BMW Group total sales. When the new Mini Countryman plug-in hybrid arrives this summer, the Group will have nine electrified vehicles available in dealer showrooms.
Krüger went on to reconfirm the dates for three significant new vehicles that we knew were coming eventually. The BMW i8 Roadster—and their press release did say "roadster" instead of "spyder"—will be a 2018 release. In 2019, we will see an all-electric Mini that will be the Group's second pure electric car joining the BMW i3. Then in 2020, BMW will launch it's first-ever all-electric X vehicle—an electric-only BMW X3.
CEO Krüger was proud of sales of the new G30 5 Series Sedan, commenting that more than twice as many of the new 5s were sold in the car's first months than the same period for the previous 5 Series last year. Orders for the BMW M550xi M Performance and the BMW 530e iPerformance have been strong.
BMW's intent is to increase sales in its top premium offerings by 2020 so it is "selectively expanding our range in the luxury class." One might think Krüger was talking about the 7 Series but we suspect he might also be thinking about a possible new range-topping 8 Series Coupe.
Krüger confirmed that Rolls-Royce's next-generation Phantom with its lighter-weight aluminum architecture will arrive before the end of 2017.
The X family of BMWs is capturing more and more of the company's total sales. That trend will probably continue when the uber-Sports Activity Vehicle—the X7—is launched. The new X3 is due out in a few months and by next year, the all-new BMW X2 Sports Activity Coupe will join the crowd.
Krüger pointed out that the 4 Series has already received its Life Cycle Impulse, the new Mini Countryman is off to a good start, and a plug-in hybrid Mini will be here in June.
Due to stringent emissions and fuel mileage mandates, powertrain development is critical to the company's health. Even with the advent of electric motors powered by batteries and fuel cells (Krüger specifically mentioned fuel cells developed in partnership with Toyota), BMW will not abandon combustion engines. It is making them more efficient. Better aerodynamics will help cars go farther on less fuel. Krüger pointed out that by 2025, all vehicles that have combustion engines will have ELV recuperation systems—brake regeneration to recover energy—which will reduce carbon dioxide emissions a further 5 to 7 percent.
Krüger was not afraid to address the ongoing discussion about diesels. Obviously referring to some European cities and countries' efforts to eliminate diesels, the Chairman said BMW would make fact-based decisions—as opposed, we assume, to emotional ones. Krüger claimed that Euro 6 Clean Diesels will use at least 25 percent less fuel than gasoline models and emit 15 percent less CO2. BMW will need cleaner diesels to meet European Union emission requirements. He also talked about incentives to get owners of older diesels to switch to newer, cleaner models.
The expected update on autonomous vehicles was quite brief; just a statement that BMW, Intel, and Mobileye are "making good progress." Likewise, Krüger mentioned electro-mobility mostly in general terms, saying, "We are strengthening this important future technology at our home base in Germany. We have the highest level of in-house development in electric engines, power electronics and battery, of any of our competitors. He was a bit more specific about autonomous and electric vehicles when he said that in 2021 the BMW iNext will be the company's "new innovation spearhead." It will be a larger BMW i vehicle that will take advantage of lightweight construction, extensive connectivity, and be highly complex. If it's done right, we hope the "highly complex" description would refer mainly to the iNext's systems and not the car's operations, which should be simple and intuitive for the average user.
Krüger wrapped up his statement by describing the BMW Group's ability to be flexible in a changing business environment, with a strong enough financial position to will allow it to remain independent. The next few years are going to be interesting.—Scott Blazey
[Photo courtesy of BMW AG.]
