The self-confidence is still there aplenty but the character of it has changed. The 2006 financial results from BMW were the first to be presented by the new chairman of the board, Norbert Reithofer, a manufacturing man by background and not a born performer.
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BMW is still pretty good at rubbing the nose of “the Stuttgart company” in the sump oil (the name Mercedes in never mentioned in polite company in Munich). The presentations are littered with references to BMW’s global leadership of the premium car market – a stunt that Mercedes used to pull for many years to great effect.
But the triumphalism is much muted. Reithofer is not given to showmanship in the way of his predecessor, Helmut Panke, who had to be reminded quite sternly about BMW’s strict retirement age rules and lifted gently from the stage.
Reithofer went out of his way at the opening to make special mention of the visiting journalists from Japan, Korea and China but when the question came from a Japanese journalist about the threat to the business from Lexus, he saw more difficulty than opportunity and batted it away without comment. In days of yore the engagement would have been great fun.
The forecast for the current financial year is not presented with the usual certainty. Where once BMW would have said that it would make another record profit, this time is was a modest “we aim to exceed.”
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By GlobalDataThe car sales forecast is almost Delphic in its complexity: “We intend to sell more than 1.4 million vehicles. This means that we aim to show a growth rate in the higher single digit percentage range.” Just image the translators in the dozen simultaneous translation booths at the back of the room grappling with that one.
Alternative interpretations are very welcome, but what I get is a maximum of nine per cent growth and minimum five. So from the start point of last year’s 1.37m units we get a spread of 70,000 to 120,000 extra cars. That’s between a third and a half of a factory’s worth which is pretty good going. The new-shape MINI, three-door 1-Series and assembly plant opening in March in India should get BMW most of the way to the lower target.
There was a reassuring discussion of action being taken on carbon emissions. Rather extraordinarily, there are new diesel engines coming shortly for MINI and for 5-Series that achieve less than 120g/km and 140g/km respectively. That means the MINI will not have to pay the London congestion charge, and that a 5-Series buyer can have the same carbon footprint as a humble Renault Clio if he so desires (which mostly he won’t).
Reithofer’s quick tour of the technical horizon shows that BMW is still wedded to getting to hydrogen technology as soon as possible and will not be diverted by electric cars. When the BMW’s diesel performance can be enhanced by 20% in a single step, the hybrid has a long way to go to be worth the research effort. Reithofer says guardedly that “…an efficient BMW diesel vehicle can definitely bear comparison with a comparable hybrid.”
Reithofer is the man responsible for creating flexible manufacturing within BMW such that customers can specify their own vehicles and change their minds less than a week before it is built. The service has given BMW a phenomenal edge over the other premium carmakers and took great upheaval to achieve.
Hydrogen is another big bet for Reithofer and his organisation – particularly given that the motorist still can’t buy any. But given the way that the BMW cashes in on its other big bets (let’s not mention Rover here) you wouldn’t want to bet against Reithofer on this one. Given the changing priorities in the world, it may be a good thing that we have a techy at the tiller, not an orator.
Rob Golding
