BMW have enjoyed a decade of success selling an ever-expanding range of four wheel drive hatchbacks. Now they are making their largest one yet. What madness is this?
“I think if you try and make something impressive, rather than good, you’re doomed.” Spen King, engineer and creator of the Range Rover.
On paper at least, BMW is the smallest and theoretically most vulnerable of the German premium big three. Daimler is bigger and its business more diverse. Audi is insulated to a large extent by nestling within the VW mothership. This however ignores BMW’s deftness as a business, to say nothing of its profitability and net worth, which may well outstrip its rivals.
Still largely controlled by the same Quandt family who have adroitly steered its fortunes for over half a century, the Bayerische Motoren Werke so far, has managed to avoid the mis-steps and reputational disasters that have befallen its Wolfsburg and Stuttgart-Untertürkheim rivals. But the times are not what they were.
Harald Krüger, Chairman of the Board of Management of BMW AG is the individual tasked with steering the carmaker through perhaps the most challenging period in its and the wider industry’s history. Announcing the company’s “NUMBER ONE > NEXT” corporate strategy from the security of a lectern at the Annual Accounts Press Conference in Munich recently, he told delegates; “We will lead the BMW Group into a new era, one in which we will transform and shape both individual mobility and the entire sector in a permanent way.” Which is a nice line in corporate wishful thinking.
Amongst the bracing challenges facing BMW is how to square the coming autonomous non-ownership revolution with the existing business of selling upmarket cars to the well-heeled. One strand of thought is that BMW will position its i sub-brand within this coming shift towards electrified, autonomous, anonymous; a service that delivers transport solutions on demand, allowing the core Bayerische Motoren Werke brand to push further upmarket, with a renewed emphasis on the high-end super luxury market where bitter rivals Mercedes-Benz have been raking in the cash so successfully of late.
Having lead the premium segment for ten consecutive years, Mercedes have recently taken the Petuelring’s lunch and have steadfastly refused to give it back. The Swabians, through a twin-pronged approach of aggressive marketing at the low-to medium end and a range of highly styled and lavishly appointed offerings at the top end, have gained for themselves an enviable position as the star on the top of the premium car fairy-tree.
To paraphrase former US President, George H. Bush, this aggression will not stand; Krüger informing delegates that “the BMW brand is now poised to strengthen its position on a sustainable basis at the top end of its product portfolio, where rates of return are at their highest. We will be broadening our model range with the BMW X7. We are also taking an in-depth look at the additional potential of this highly attractive segment.”
Now, a cynic might suggest that having seen how much money Daimler-Benz are making selling over-sized, over-aggressive vulgarities to the over-privileged and self-entitled, Mr. Krüger has taken the business-logical decision to chase the same customers by offering some tawdry, oversized trinkets of his own. Allow your famished eyes to dwell for a moment (but a moment only) upon the Concept X7 iPerformance, destined for the upcoming Frankfurt motor show – a moderately bejazzled version of the forthcoming SUV range-topper. Is that enough vinegar on your chips, madam?
Ian Robertson, BMW sales and marketing director was deemed responsible for the following utterance. “Since BMW founded the Sports Activity Vehicle segment with the first X5 in 1999, every subsequent X vehicle has broken new ground.” Which is, I’m sure you’ll agree, a statement to ruminate upon on quite a number of levels. From the foregoing however I do wonder if we can assume that ferrying ones over-insulated offspring to the school gates in one of these leviathans is now viewed by BMW’s marketers as a ‘sports activity’? I merely request clarification.
I’d rather not be snide. It’s obvious that BMW (like everyone else) are a business first and a car maker second. It’s also bitingly clear that the challenges facing car makers as they attempt to navigate an environment where emissions-driven legislative change on one hand and an avaricious tech-sector on the other stand a better than even chance of squeezing them to the point of extinction. However, one has to seriously question whether this insane rush to ever-larger, more aggressive looking behemoths is anything resembling an answer? Because to these eyes at least, it looks a good deal more like a one way ticket to Palookaville.
The decisions BMW management are making now will not only determine the business’ long-term viability but how we continue to perceive the marque both in brand and product terms. They may even determine whether BMW will survive the oncoming changes to the auto business model in any recognisable form at all.
But if BMW and its ‘prestige’ big name rivals genuinely believe a sustainable path forward for the industry is in building bloated leviathans for fevered egos, they are in effect becoming the agents of their own demise.
Spen King quote: AROnline.