BMW World Headquarters

The BMW group has announced a leaner approach to sales across its brands which includes a major cost-cutting exercise over the next few years.

The group remains committed to its NUMBER ONE > NEXT strategy but a number of factors including high investment in electric cars and rising input costs seem to have triggered this rethink.

The group announced a move to a global integration of all sales functions under board member Pieter Nota a couple of days ago. Nota will also remain responsible for additional functions including brand and product management and aftersales. Meanwhile, BMW Motorrad will become part of the Development Division under Management Board member Klaus Fröhlich. Now the company has also announced a move to shedding costs, while following the long term strategy. The cost savings should see the BMW Group shed almost 12 billion Euros in cost till 2022.

BMW Group Chairman Harald Krüger
BMW Group Chairman Harald Krüger

“After three years of Strategy NUMBER ONE > NEXT, we remain firmly on course, having established a strong position as one of the world’s top providers of e-mobility. We lead the European market and will soon go into series production of our fifth generation of electric drivetrain systems. We’re significantly expanding our presence in the upper luxury class. Our first highly automated vehicle will become available in 2021 and we are already now paving the way for the development of the next generation of groundbreaking technology. In the field of mobility services, we are joining forces with Daimler AG to create even greater momentum,” said Harald Krüger, Chairman of the Board of Management of BMW AG, in Munich on Wednesday. “We need to work systematically on our operational excellence in order to leverage these strategic advances and ensure our ability to use our own underlying strength to help shape the sector’s transformation going forward,” he added.

The group sees the roll out of the new BMW X7, the new 7-series and the 8-series vehicles as pushing the profitability higher, and will experiment with new models to get more customers – this includes the introduction of the 2-series Gran Coupé by 2020. On the other hand the group will also be trimming almost 50% of the powertrains it offers along with phasing out models that have had no significant appeal like the 3-series GT.

“Our industry is witnessing rapid transformation. In this environment, a sustained high level of profitability is crucial if we are to continue driving change,” said Nicolas Peter, Member of the Board of Management of BMW AG, Finance. “In view of the numerous additional factors negatively impacting earnings, we began to introduce countermeasures at an early stage and have taken a number of far-reaching decisions. Discipline and a clear focus on rigorous implementation are essential as we aim to emerge from these challenging times stronger than ever.”


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