BMW, at the age of 100, and as the builder of the self-crowned “ultimate driving machine” today stares into a future when cars will drive themselves.
Leaving the question: What is the company’s place in that future?
Bayerische Motoren Werke, launched as a builder of aircraft engines on March 7, 1916, used its centenary celebration on Monday to remember the past as a launch pad into the future. The “next 100 years” theme had been tipped at the Geneva Motor Show last week when Klaus Froehlich, a board member responsible for research and development, cited the company’s competition not as Audi, Mercedes-Benz, Cadillac, Continental and other luxury brands, rather as Uber and ride-sharing services.
“Our task is to preserve our business model without surrendering it to an Internet player, otherwise we will end up as the Foxconn for a company like Apple, delivering only the metal bodies for them,” Froehlich told Reuters, saying the challenge ahead is to build the world’s most intelligent car.
Indeed, at a shy-on-details press conference staged Monday in a renovated building used a century ago to manufacture aircraft engines, CEO Harald Krueger said, “The car will soon be your digital chauffeur and personal companion. Transportation will become a personal experience.”
With pressure from many corners to reduce or nullify emissions in urban areas, manufacturers are responding by offering purely electric vehicles, hybrids combining a gas engine and electric motor, or plug-in hybrids. BMW plans to demonstrate four concept vehicles this year – a BMW brand Vision, a Rolls-Royce, a Mini, and a Motorrad – toward its vision of fully connected, individually-tailored driving.
The Vision, shown Monday, is a coupe-styled car with luxury sedan interior space, an austere dash and “steering furniture” – a wheel that looks as though it came out of an Xbox package. The body folds down over the wheels, for aerodynamic efficiency, and the grille houses sensors. Three modes would give the driver a choice to control the vehicle or allow the vehicle to drive itself.
The company has dexterity built into its DNA to take it on, Kruger said. Having been scarred by, and indeed drawn into the atrocities of the Second World War, and nearly taken over by a rival thereafter, in the past half-century BMW has demonstrated an unerring knack for sensing driver demand, of evolving its vehicle lineup to meet demand. As you peer into the company’s history, what stands out since the 1960s is how one vehicle has led to the next in unfailing succession.
Today, BMW sells two million units annually – with 42,000 sold in Canada last year, including Mini – to reign as the No. 1 producer of luxury vehicles globally. It uses 25 production plants in 14 countries. In addition to Mini, the company owns Rolls-Royce and a thriving motorcycle business, Motorrad, that dates to post-First World War (sales in Canada last year, 2,015).
On the automotive side, the business model is simple – aiming to lead virtually every segment in the luxury class, ranging from sports cars to sedan to sport utility to supercar. All that’s missing is a minivan. The company has been able to tap into the passions of motorists seeking a sporty ride, inspiring a loyalty that enables BMW to be ranked by Forbes as the 16th most valuable brand globally, behind only Toyota among auto makers.
“There are some really great driving cars in the world and other brands who build a few; we build a whole bunch of them,” says Hans Blesse, CEO of BMW Group Canada. “What it is, and this is my own personal opinion, is the way they talk to you. The 3 Series really put us on the map in Canada, and my first BMW was an [all-wheel drive] 325iX. The joke we used to have – if you drive over a coin, you could tell if it was heads or tails. It just gave you that much feedback, and the feedback gives you the confidence to drive the cars.”
Yet, the lineup is gas-powered and no model is driving itself, yet. In Canada, BMW sells 34 models and of those two are electric, the i3 and the plug-in hybrid i8. As the future unfolds, that ratio will inevitably shift dramatically as ride-sharing, electric-powered and autonomous vehicles disrupt an industry based for the last 100 years and beyond on petrol-fueled engines.
“In the auto industry the battle will be not for horsepower – but bragging rights will be, ‘My car is more autonomous than your car’,” Manuela Papadopol, director, global marketing automotive for Elektrobit, a software company, told Reuters.
Started as an aviation company by Karl Rapp and Gustav Otto, BMW built a line of promisingly innovative cars between 1928 and 1941 before being turned to support Hitler’s war effort. The 3 Series, the rock of success since the 1970s, arguably dates to 1933 when BMW showed off the 303 at the Berlin Motor Show, with a new six-cylinder inline engine, two-part kidney-shaped grille, long bonnet and roomy interior. In 1936, the BMW 326, powered by a 50-horsepower, six-cylinder, sold some 16,000 units. Those vehicles were built with weight optimization as an underlying principle to enhance acceleration, handling and braking – and the characteristics seeded the vehicles on the streets today, the company says.
Before the onset of the Second World War, BMW had built a strong three-pronged international business in the aero-engine, motorcycle and automotive fields, with only upside in sight. Along with other major German companies, it has since admitted to using convicts, prisoners of war, and inmates from concentration camps for slave labour during the war, as it supplied Hitler’s forces with military needs. Germany surrendered in May, 1945; in 1999, 55 years later, BMW was among the founding members of the foundation called Remembrance, Responsibility, Future, formed to compensate victims. Four pages into a 41-page document prepared for the press to mark the centenary, BMW again acknowledged this chapter in its history.
As after the First and Second World Wars, its production restricted by the Allies, BMW returned slowly to its core business by making motorcycles – in 1948, the R 24 was the first. It would take until 1952 to build another car, though consumers saw none of the appeal of the 1930s gems. Years of money-losing operations led to a near-sale of the company to Daimler-Benz AG in 1959 – when the sporty 700 was launched.
In 1961, though, the BMW 1500, a four-door mid-range saloon, launched the pivotal “New Class” of cars, generating demand and breathing life into automotive operations for the first time since the 1930s. It ran on four cylinders, generated 80 horsepower and needed high-test gasoline. Two years later, the company had returned to profitability, and BMW trotted out the “ultimate driving machine” slogan. In 11 years, BMW sold 350,000 New Class cars.
BMW began hitting its stride with cars in the late 1960s and early 1970s with engineering advancements. Construction of the so-called four-cylinders headquarters in Munich seemed almost in defiance of the worldwide oil crisis. The 5 Series began the transformation from the New Class into a new generation of car; today the 5 Series sedan lives in Canada, with a starting price of $60,500.
In 1973, an exhaust turbocharger was fitted to a European car for the first time – the new two-door BMW 2002 generated 170 horsepower and found a niche among drivers seeking agile handling. BMW sold more than 862,000 units of the 02 series by 1977.
In 1975, the 3 Series, a compact executive vehicle, succeeded the 02 series – an event considered so critical at the time, the board of management presented the car in an event at Munich’s Olympic Stadium. Now in a sixth generation, it remains BMW’s top-seller with a range including a four-door sedan, two-door convertible, five-door hatchback, four door Gran Turismo. In Canada, there are five models, starting at $36,000.
The 7 Series has evolved as the company’s technological flagship, and a primary example of one model leading to the next. The E23 (1977-86) featured “computer controls”, a driver's airbag and interior lighting delay; the E32 (1986-93) had electric window lift, a 12-cylinder engine – the first by a German company since the 1930s) – and traction/stability control; the E38 (1994-2001) came with a nav screen, climate control and memory seats; the E65 (2001-08) integrated iDrive infotainment, roll stabilization, a six-speed automatic, push-button start, radar cruise control and an aluminum chassis; the F01 (2008-15) brought in a head-up display, surround view, real-time traffic information; the most recent G11/G12 (2015-) introduces gesture control of the infotainment system, executive lounge rear compartment, carbon core, a touch command tablet, 3D surround view, wireless charging and lane-hold assist. The 7 Series starts at $114,000 in Canada.
“We were at the [most recent] 7 Series launch showing all the innovations and got a good chuckle because the first 7 innovation was an on-board computer –and all it did was show the outside temperature,” Blesse said. “It’s unfair to compare that to the technology today, but then, it was revolutionary.”
BMW bought British Rover in 1994 but hived off the group save for the Mini in 2000, while also buying the rights to Rolls-Royce.
In 1999, anticipating a move away from minivans, the company introduced the X5, its first in the sports activity vehicle segment. Today in Canada, there are five models in the X lineup, the 1-3-4-5-6, with starting prices ranging from $38,800 to $69,700.
And now, it looks toward an emission-free future. The electric i3 debuted in 2013, built with an entirely new architecture. “We have to do a better job in the industry of getting them to drive [electric vehicles],” Blesse said. “I was prepared not to like the i3 when a personal friend took me to the racetrack. I couldn’t stop giggling. We came back, crunched the numbers, found it has the same power-to-weight ratio as the original M3 does. Wow.”
Then as now, just as in the 1930s. In 2014, the plug-in hybrid i8 came forward as the sports car of the future.
Correction: BMW was founded on March 7, 1916, not May 7, 2016, as stated in an earlier online version of this story.Report Typo/Error
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