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BMW Bets $100 Million on New Business Ventures

A cautious carmaker takes some risks.

by on Apr.14, 2011

Renamed i8, the BMW Vision concept will be one of the first two models for the maker's new BMW i sub-brand.

No risk, no reward, right? Corporate graveyards are littered with the decaying remains of corporate business ventures and significant investments into unknown businesses about which little was known, technology was paramount, executive management was inexperienced or the board of directors was brain dead. Not exactly a stunning review or forecast of the future, especially now.

That is why it was surprising when BMW, known for its calm, considered and cautious approach to business, announced BMW i Ventures, a venture capital company with an investment fund of up to $100 million to develop “individual mobility solutions” for the world’s biggest cities. This is in addition to the previously announced BMW i secondary brand of the Munich based company.

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BMW i, according to a recent statement, is the new business for sustainable vehicles and mobility solutions including the BMW i3 and BMW i8 model cars, to be launched in 2013, that will be built in a new €400 million factory in Leipzig, Germany. “The BMW i brand is the response to changing customer needs, including increasing demand for alternative drive trains, such as electric drive systems and hybrids’,” noted Ian Robertson, member of the Board of Management of BMW AG responsible for sales and marketing.

Joerg Reimann, managing director of the new business told me in a recent telephone interview, “BMW i Ventures is the second pillar under the BMW i brand is focusing on services not necessarily connected to cars,” which, he admits, is, “An unconventional approach.”   The new division is aiming at consumers in high density, megacities where not all will own or need to own an automobile – thus increasing the need for solutions involving public transportation and organizing one’s life.