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“Generational Change” Seeds Shake-Up at BMW

Key executive jumps to VW; could be rival's next CEO.

by on Dec.09, 2014

Outgoing BMW CEO Norbert Reithofer shown during the launch of the BMW i3 battery-car.

BMW AG is in the midst of a major management realignment that will see a new CEO step-in, while its product development chief heads to a key competitor.

The moves announced earlier today together comprise one of the most significant shake-ups to roil the Bavarian maker since it was forced to sell off its failing British subsidiary Rover more than a decade ago.

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The loss of product boss Herbert Diess could be a particularly tough blow for BMW – but it is being seen as a major development for Volkswagen AG, where he is seen as a potential candidate for that maker’s top spot when its current CEO retires.

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BMW Earnings Up 14% Despite European Slump

But CEO warns of “headwinds” ahead.

by on Nov.07, 2012

BMW CEO Reithofer sees growing trouble ahead as the European market continues to struggle.

Despite the weakening European economy, BMW AG posted another strong quarter, with earnings up 14% but expected to slow in the months ahead.

The world’s largest premium automaker said its earnings before interest and taxes came to 2 billion Euros, or $2.6 billion, between July and September, led by growth in the U.S. and China as well as by the strong performance of its lending subsidiary. That was well ahead of the 1.74 billion Euros consensus from industry analysts. Net income was up 16%, to 1.29 billion Euros.

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Nonetheless, Chief Executive Norbert Reithofer warned that conditions were weakening across its home markets in Europe and could offset gains in other markets.

“Like the rest of the sector, we are now beginning to feel some headwind,” he said in a statement. “We have to acknowledge that we are all facing dramatic challenges and uncertainties in the global economy today.”

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Toyota, BMW Expand Their Alliance

New efforts will include fuel cells, electric powertrains and a future sports car.

by on Jun.29, 2012

Toyota and BMW officials during a news conference announcing their original alliance last December.

Toyota and BMW have confirmed they will substantially expand the nascent partnership they first launched late last year – signing a memorandum of understanding that will cover work in four key areas including high-tech fuel cells as well as the foundational “architecture” of a future sports car.

The two makers had first agreed to a limited alliance last December – echoing steps taken by a number of their key competitors, such as Daimler AG and the Renault-Nissan Alliance.  Those three brands have been rapidly expanding their own partnership in a bid to expand global economies of scale and to bring new technologies to market faster than might otherwise be possible working individually.

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“It is one way of securing long-term access to customers and technologies,” said Toyota Motor Co. President Akio Toyoda, during a news conference at BMW headquarters in Munich.

For his part, Bayerische Motoren Werke CEO Norbert Reithofer emphasized that, “For the BMW Group, strategic partnerships are an essential part of our strategy.”

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Toyota and BMW Discuss Expanded Alliance

Looking at fuel cells, lithium batteries and other projects.

by on Jun.25, 2012

Toyota CEO Akio Toyoda. is soon expected to announce an expanded alliance with BMW.

It’s the era of the automotive alliance and it appears that Toyota and BMW are looking to expand the unlikely partnership they first announced last December.

At that time, BMW announced it would supply diesel engines to the Japanese automaker. Toyota, meanwhile, revealed plans to work with its German counterpart on advanced lithium-ion battery technology.  Now, the German magazine Der Spiegel reports, the two makers will announce a much larger range of ventures that could include hybrid technology, fuel cells and vehicle electronics.

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That’s a significant shift for both companies, BMW and Toyota traditionally preferring to go it alone rather than team up with erstwhile competitors.  But Yoshi Inaba, president and COO of Toyota Motor North America, told TheDetroitBureau.com that a change in strategy was urgently needed because, “No one can handle it all by themselves.”

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Is BMW Going Front-Wheel Drive?

1-Series GT reportedly due to debut in Paris next autumn.

by on Jun.11, 2012

Is BMW ready to adopt front-wheel-drive? Apparently on at least one new model to come.

While it’s probably not the end of the world some might see another sign of the apocalypse in BMW’s apparent plan to introduce its first front-wheel-drive model at the upcoming Paris Motor Show.

The new offering will bear the badge of a 1-Series GT and is reportedly going to share the same platform as the next-generation Mini, according to our friends at Autoblog and Britain’s Autocar.

Other sources suggest it will also be dubbed the new Compact Activity Tourer, or CAV, reflecting its tall, crossover-like shape.  It would complement, rather than replace the new X1 Sport Activity Vehicle, or SAV.  It’s expected to feature a higher seating position than other 1-Series models, much like BMW’s current 5-Series GT.

The new 1-er GT is apparently being developed to compete with the latest-generation Mercedes-Benz B-Class line.

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BMW Chairman Norbert Reithof first signaled the possibility of a front-driver back in 2010 and the upcoming update of the Mini was a perfect opportunity.  Like all automakers, BMW is intent on improving its economies of scale by sharing components wherever possible.  Nonetheless, purists were hoping the maker would back away from that strategy and retain its focus on rear- or all-wheel-drive across the line-up.

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BMW Sees Big Year Ahead

But there are big risks ahead.

by on Mar.14, 2012

One of many new models: the 6-Series Grand Coupe is BMW's first-ever 4-door coupe.

The BMW Group is looking beyond the threat of a steep recession in Europe and is predicting another record year in 2012.

Global growth, from the recovering U.S. market to the boom in luxury demand in emerging markets like China, Russia and Brazil should play a big role in the year ahead, according to the Bavarian maker’s chief executive.  Significantly, BMW ended 2011 as the number one luxury maker in the still-critical American market, the first time it has ever beaten all comers, including Mercedes-Benz and Lexus.

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“We are targeting new highs in sales volume and pre-tax earnings for 2012”, stated Norbert Reithofer, Chairman of the Board of Management of BMW AG at the Annual Accounts Press Conference in Munich on Tuesday.

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BMW Sets Sales and Profit Records

Maker forecasting even better 2012.

by on Mar.09, 2012

New products, like the M6 and 6-Series Grand Coupe, shown here at their Geneva debut, should yield another good year for BMW, the maker predicts.

A mix of new products and a resurgent luxury market paid off handsomely for the BMW Group last year, the Bavarian maker reporting all-time records for sales, unit volume and earnings.

While there were a few weak points, 2011 marked some significant milestones, company officials noted – BMW notably pushing past rivals Lexus and Mercedes-Benz, for the first time, to become the best-selling luxury brand in the critical U.S. market.

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“The past year has been the best year in the BMW Group’s corporate history, proclaimed Norbert Reithofer, the Chairman of the Board of Management of BMW AG. “We have achieved new sales volume, revenues and earnings highs, and exceeded our targets.”

With additional products, notably including the all-new 3-Series on tap for 2012, the BMW Group forecasts that sales volumes will continue to develop positively in the current year.

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BMW Boosts Production at Spartanburg Plant – And Further Growth Could Follow

Key to corporate goal of boosting sales 55% by 2020.

by on Oct.21, 2010

BMW may have further growth plans for the newly-expanded assembly line in Spartanburg.

It may be a “German” automaker, but BMW is counting on its assembly plant in Spartanburg, South Carolina, to help drive its goal of increasing sales by 55% before the end of the coming decade.

And to get there, the maker is pumping an extra $750 million to expand the factory, known internally as plant 10, which has become its critical source for multipurpose vehicles like the X5 and the newly-updated X3.

“We will continue to invest” in Spartanburg, proclaimed BMW’s chief Nortbert Reithofer, who was present at a ceremony to celebrate the completion of the newly-expanded factory.

Though “plant 10” has produced a wide range of products since it first opened, nearly two decades ago, it today focuses on BMW’s so-called “sport-activity vehicles.”  And for good reason, considering the huge demand for such products in the States.  But sales are growing worldwide, making the Spartanburg plant today one of the biggest exporters – on a dollar basis – of any factory in the U.S.

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A full 70% of the vehicles produced in the South Carolina facility are exported.

Building demand with new models, such as the revised 2011 X3 is critical if BMW is to achieve the projects sales growth of 55% — to a total of 2 million vehicles per year — by 2020.

But Spartanburg alone won’t be able to handle that hefty increase, and Reithofer said that BMW needs to build an all-new plant, though he declined to name a location. Last April, on the eve of the Beijing Motor Show, he said that the X1 could be one of the models to be produced at the company’snew Chinese plant in Tiexi, in Shenyang province.

“Together with the Chinese authorities we are investigating the possibilities,” said Reithofer, adding that, the investment will be 560 million euro, half on the account of BMW and the other half on the account of its Chinese partner, Brilliance. The yearly capacity of the Tiexi plant is planned to be around 100,000 units in 2012.

The company started production in Spartanburg in 1994 with the 3-Series, followed by the Z3 and Z4. Since 1999 BMW has been using the factory to assemble the X5, and since 2008 the X6.

In the past sixteen years the plant produced more than 1.6 million vehicles overall. With the new extension the yearly capacity can be cranked up from 160,000 to 240,000 units.

The 1.2 million square-foot expansion includes a body shop, assembly hall and paint shop.

BMW started production of the second generation of the 2011 X3 in September. Approximately 1,600 extra jobs were opened up, in addition to the existing 6,000 employees. An external report states that directly and indirectly BMW generates 23,000 jobs in South Carolina.

BMW has been emphasizing the environmental friendliness of its American plant.  In Spartanburg the new paint shop uses the so-called IPP, or Integrated Paint Process, an electronically-managed system that eliminates several traditional steps, leading to a 30% decrease of energy usage and, consequently, to a 45% reduction in CO2-emissions.  That, the maker claims, is a savings of 92,000 tons per year.

Methane gas from a nearby landfill powers around half of the energy needs of the plant. Total savings amount to around $5 million per year.

The extension should allow BMW to remain the number one European premium brand on the U.S. market, it contends. But its German competitors, especially Mercedes-Benz, are closing the gap.

The second generation of the X3 will probably be joined by yet another model line. During the celebration in Spartanburg, Jim O’Donnell, president of BMW North America, said that BMW will introduce its small X1 model in this market in the first half of 2011.

Frank-Peter Arndt, BMW Group board member,  denied later that evening, the existence of such plans.

BMW’s philosophy is to build a model line in the country where it is best sold. With respect to the X3 the US market is good for 50% of worldwide sales.

The German newspaper Handelsblatt reported a day after the ceremony that BMW is considering building the 3-Series passenger car model in the US. It will be financially easier to compete with the C-Class that is produced in the Mercedes plant in Tuscaloosa, Alabama.

BMW Puts Frankfurt Auto Show Stand into Motion

Display includes indoor track to display new models in action.

by on Sep.16, 2009

BMW CEO Norbert Reithofer circles the test track at the automaker's Frankfurt Motor Show stand in a classic Bavarian roadster.

BMW CEO Norbert Reithofer (in passenger seat) circles the test track at the automaker's Frankfurt Motor Show stand in a classic Bavarian roadster.

Among automotive aficionados, you’ll frequently hear it said that this model or another “looks different” on the road from how it appears at the auto show.  There may be a good reason, considering that cars are meant to be driven, rather than worshipped, like sheet metal art, sitting atop a turntable.

BMW is trying to put things into a more real world perspective, at the 2009 Frankfurt Motor Show.  The Bavarian maker relocated from its normal display near the front of the Frankfurt Messe, but it’s betting potential customers won’t complain too much once the walk nearly a kilometer to the back of the sprawling convention center and look inside the newest pavilion, Halle 11.

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As Ken Zino previously reported, in a corner of the BMW stand, which fills the entire building, the automaker has created a circular track, on which it will continuously run its latest offerings, for the excitement and amusement of visitors.

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