Look up the array of cars and SUVs BMW is selling these days, and it will blow your mind if you are a BMW fan who has driven the same ride for the last 20 years and want to re-up.
It used to be the 3 Series, 5 Series, 7 Series, the X5, a Z sports car, M Cars, and each had a handful of engine and body style derivatives. Today, the models are like balls in a McDonald's ball-play room. The 2 Series, 4 Series, 6 Series, 8 Series, X1, x3, X6, X7, M cars, the i-Electrics, special edition models. It is complexity on wheels, and a bunch of these models just don't sell.
BMW, though, is replacing its Chairman of the Board of Management Harald Krueger with Oliver Zipse, and when he sits in the chair come the middle of August, he'll have the hedge trimmers out. According to Automobile Magazine, management is canceling the convertible version of the 2 Series, the standard-wheelbase 7 Series, the X2, the coupe and convertible variants of the 8 Series, and the next-generation Z4. That's a start.
BMW is becoming more of a true sport-utility brand. BMW has reportedly, according to Automobile, an SUV X8 that will have a plug-in EV option with up to 60 miles of electric range. An X8 M is also in the pipeline, which of course would come with a serious performance package.
BMW is faced with enormous challenges, like other companies, even more so perhaps. The company has long been associated with a sporty driving experience-The Ultimate Driving Machine-and the coming world of electrification is not seen as glamorous and cool as the internal-combustion-engine (ICE) world of BMW's engines and stiff chassis.
Of course, that is largely perception. While EVs are still hampered by range issues for most companies, EVs can go zero-to-sixty faster than ICE vehicles. BMW largely has the technology to make EVs every bit as fast and sporty as Tesla EV vehicles, but it must navigate the transformation in a way that does not put too much investment ahead of the consumer and the marketplace, while guarding quarterly profitability.
BMW lost money on its automotive business in the first quarter of the year after it was hit by a 1.4 billion euro ($1.6 billion) charge for an antitrust case and by higher upfront costs for new technology. The financial services and motorcycle divisions kept the group in the black. Both the BMW and MINI brands are both feeling enormous competitive pressure.
Still, BMW knows that EVs are growing, in China, Europe and the U.S. Thus, the company has set a goal of having 25 electrified models in 2023-two years ahead of its previous schedule. It said it expects sales of its electrified vehicles to double by 2021. The company is focusing on plug-in hybrids to achieve it.
BMW and Daimler, which are arch rivals in the luxury car market, are in the midst of a strategic partnership focused on highly-automated and autonomous driving. That is an area that is still developing and won't pay real dividends until after 2030, so the two companies are investing $1 billion in a new venture to develop services including ride-sharing and charging systems for electric cars. Companies are writing a new playbook for cooperating with rivals to lower costs without compromising competitive edge.
One of the drains on BMW's earnings is Trump tariffs on vehicles built in Spartanburg, South Carolina, and shipped to China. China has been a good export market for the German brand, but China has retaliatory tariffs on tariffs that Trump layered onto good going from China to the U.S.
by: www.forbes.com
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