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Sketch of BMW's Megacity concept car (BMW)
Sketch of BMW's Megacity concept car (BMW)

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A bold move for luxury car maker BMW Add to ...

The word on the auto show floor in Paris was "blasphemy!"

BMW AG, the world's largest luxury auto maker, had just announced the impending production of a family of small, front-wheel-drive cars to be sold in North America. Front-drive BMWs? For North America? Small cars, smaller than the 1-Series going on sale in two or three years as premium entries?

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The scribes, commentators and pundits were aghast. BMW's UKL - a German acronym for lower compact class - could not possibly be part of a bigger family of "ultimate driving machines." Only rear-drive and perhaps all-wheel-drive vehicles can deliver "ultimate" performance. Front-drive vehicles do not provide the right blend of handling and steering dynamics.

But Ian Robertson, BMW board member for sales and marketing, was there arguing for front-wheel-drive. He would not say which body styles BMW is developing, but he confirmed that the vehicles will have a four-cylinder engine in North America.

"It will be a relatively big segment because we have several body styles," Robertson said in Paris. European media reports say BMW is planning at least three variants. And like other BMW senior executives, he suggested the introduction of a front-drive line will precede an event even more important: the launch of BMW's Megacity electric car in 2013.

BMW shocked the automobile industry by putting a Mini Scooter E Concept on display at the Paris Motor Show.

Then another shocker over at BMW's Mini brand: the Mini Scooter E two-wheeler concept.

Adrian van Hooydonk, BMW's design director, said the concept was a tremendous challenge for his team. No one on the car side of the BMW and Mini design groups had ever done a two-wheeler; and no designer at Motorrad, the motorcycle division, had ever done an electric vehicle. So he put together a team of motorcycle and car designers and told them to stretch themselves and dream. Van Hooydonk himself joined them in sketching out his ideas for an electric scooter.

We want to deliver what people so far think is impossible: the combination of joy and zero emissions Adrian van Hooydonk, BMW's design director

Van Hooydonk says the scooter meets the needs of a new type of urban buyer, one who is young and spontaneous and wants flexible, CO2-free mobility. In this concept, the ignition key is a smart phone, a communication tool and navigation system. The scooter is powered by an electric motor that can be recharged at any conventional power socket using an on-board charging cable.

"The Mini Scooter E Concept represents an electric vision of the future as urban mobility takes a new direction by Mini," said van Hooydonk.

Both the front-drive announcement and the electric scooter represent BMW slowly peeling back the onion of its future. BMW today is in the midst of reinventing itself to take on a world of sprawling, heavily populated urban areas - megacities. The Bavarian auto maker has become obsessed and utterly focused on what it means to be a premium auto maker in the 21st century. That means reconciling vehicles of style and performance in an environment where so-called "green" sensibilities hold sway.

Most important of all, BMW sees its growth coming not in a crowded Europe or an energy-paranoid United States, but in China, where massive megacities keep expanding, and where the growth opportunities are the best. BMW, like its German rivals, sees its future tied to success in China.

They are right. One key to understanding what's happening at BMW and other global auto makers is infrastructure investment in China. The government there, working with various utilities, plans to boost its electric vehicle charging network program, and do so massively. The State Grid Corporation of China, China Southern Power Grid, Sinopec and other Chinese energy giants have announced plans to construct electric vehicle charging stations. State Grid alone plans to build 10,000 charging stations and more than 500,000 AC charge piles by 2020. Billions are being invested.

For Mini, an electric scooter is a complete left turn from the small, urban automobiles that have been the brand's trademark for 50 years, from its beginnings in the swinging London of the 1960s, to today under German ownership. A Mini is a car, not a scooter, so the EV concept risks muddying the brand's image.

And by going front-wheel-drive in any car line, BMW risks creating confusion where none has existed before. If BMW is also a front-drive car maker, then, what does the brand really stand for? BMW aficionados despise front-drive. Period. Those fanatics surely will never be convinced that a driver's car can also be a front-driver.

BMW, though, is undeterred. Under chief executive officer Norbert Reithofer, the Munich-based car company is focused on taking advantage of what is happening in so-called urban megalopolises, the fastest-growing new-vehicle markets in the world. That explains the Megacity Vehicle, a battery-powered city car built of carbon fibre and aluminum. To pave the way for its introduction and to build on the ideas and concepts behind it, BMW is changing itself from the inside out.

"The Megacity Vehicle is a must-have for BMW," says Reithofer, a BMW veteran of more than 20 years who is in his mid-50s.

"We don't see threats; we see opportunities," says van Hooydonk, an 18-year BMW veteran whom Reithofer installed as design chief last year. "That's an indication of how this company thinks and the kind of energy that Dr. Reithofer brings to the company. 'It is what you make of it,' that's what he always says."

For a car company that last reinvented itself as "premium" back in the 1970s, the shift from beautiful cars that go fast to this emerging emphasis on sustainability is shocking. Surely it is not entirely embraced by at least some of the horsepower-driven types inside the company. Yet public dissent is unheard of from employees.

Still, what BMW has been doing for nearly 40 years has worked: in 2005, BMW topped archrival Daimler's Mercedes-Benz in sales and has held the global top spot among luxury car companies since.

Not only have sales grown to what is expected to be 1.4 million vehicles globally this year, BMW is also highly profitable. Profit margins are expected to hit 6.6 per cent this year. So all seems good. Why change a winning formula?

BMW's problem is that it's a tiny company by global standards. Mercedes is part of a larger conglomerate that makes buses and trucks, allowing it to spread costs into far-reaching and varied corners of the company. Audi, its Bavarian rival, is part of the huge Volkswagen Group of 10 brands, ranging from Bentley to Porsche. Moreover, Audi has aggressively said it will topple BMW as the No. 1 luxury auto maker by 2015. The pressures on BMW are enormous.

Yet here is BMW, venturing from its core competencies into front-drive cars, electric scooters and carbon-fibre Megacity Vehicles. If this emerging new direction into sustainable transportation fails, BMW is in a great deal of trouble. Its room to manoeuvre as a completely independent auto maker will narrow. BMW, then, is risking its independence.

That's a courageous place to go. Many inside BMW are committed to the idea of change, however. Those like van Hooydonk are undeterred.

"Since we're BMW, we don't want to create just any old electric car," says the design chief. "We want to deliver what people so far think is impossible: the combination of joy and zero emissions."

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