KARL MOORE – This is Karl Moore of the Desautels Faculty of Management at McGill University, Talking Management for the Globe & Mail. Today I am delighted to be in Munich, Germany with 37 McGill students and Alumni. We are at BMW where we are meeting with Ian Robertson who is the chairman of Rolls-Royce and the senior executive responsible at BMW for Sales & Marketing worldwide.
So Ian, when we look at it, one of the big questions we have for the automobile industry is environmental impact. What is BMW's approach to making the environment less of an issue for the world?
IAN ROBERTSON - I think it's very important to understand that whether you are in North America, whether you are in Europe or in Asia that there is a certainty that CO2 will continue to be driven down by governments all around the world.
For all the reasons that we know now, are they robust in their reasoning? Time will tell. But all the targeting is bringing that CO2 down. For us as a company we have, over the last 5 or 6 years, driven a program called EfficientDynamics, which takes out CO2 without losing horsepower and without losing enjoyment or the ultimate driving experience feeling on a BMW and so on and so forth.
That CO2 has been driven down over 25 per cent over that many years, or over the last three to four years to be precise. What that gives you is an indication of some of the technology that is being applied and that technology, so far, has resulted in investments of about $1.2-billion to 1.3-billion and involves things like start-stop motors. Start-stop motors save somewhere between 10-15 per cent of fuel: every time you stop, the engine stops, and every time you move away the engine goes again. It's simple.
Other more complicated things like break regeneration, they can recharge the battery while you use the breaks, again saves energy. The next big step here is that zero emission vehicles will also be required within in the mix and as CO2 comes down then, on an average level, the zero emission vehicles start to have an effect.
Now governments all around the world are really pushing this in certain ways. In the United States you can get a credit against your tax if you have a zero emission vehicle. In Europe here, if you are in the Belgium market, less than a hundred and five grams can give you up to 4 thousand euros a year. Major incentive! Similarly in the U.K., and so on and so forth.
So for us, as a company, we are not engaged on developing zero-emission vehicles as well as all of the conventional improvements to do. What we believe firmly is that you cannot take a conventional vehicle and simply take out the petrol engine or the diesel engine and stick an electric motor in because that's just compromised.
One thing for certain is that maybe, for the first time in automotive history, you can have a very clear business case for weight. The more weight you take out of a vehicle the less batteries you made need to make that vehicle move forward and batteries are heavy and expensive. So now, weight pays – so take a kilo out, save a kilo of batteries, and there is a very strong business case.