BMW shifts focus towards electric cars and autonomous driving
by Edward Taylor,
2016-03-16 17:01:30.0
MUNICH — German car maker BMW says it will focus on electric vehicles and automated driving and develop its software and technology services as part of a new strategy for the 100-year-old company.
The emergence of rivals including ride-sharing company Uber and technology group Alphabet, which has developed its own self-driving car, has prompted BMW to rethink its traditional strategy of selling large, powerful, luxury cars.
"We are leading BMW Group into a new era," CEO Harald Krueger told journalists at BMW’s annual results news conference.
"To this end we leverage innovative technologies, comprehensive connectivity and zero-emission mobility. All of these need to be industrialised, bearing in mind our business responsibilities, and in a sustainable manner, which in itself is another great challenge," he added.
BMW Group aims to achieve a pretax margin of at least 10% from 2017 to 2020 by pushing digital connectivity, autonomous cars and developing businesses including motorcycles.
Shares in BMW rose 3.7% to €82.48 by 9.37am GMT on Wednesday, outperforming a 2.1% rise by the STOXX Europe automobiles index.
New technologies have created opportunities for the automotive industry, forcing the Bavarian carmaker to evolve its business beyond mechanical engineering towards becoming a software and technology company.
"The value creation is shifting from the actual hardware toward software and services," Mr Krueger said.
BMW said it would focus on developing the businesses of high-definition digital maps, sensor technology, cloud technology and artificial intelligence.
BMW will also push services including providing wall-mounted electric car charging boxes and software programmes to help drivers find a parking space with its ParkNow and ChargeNow services.
In addition, it will seek to maintain the high profitability of its cars business by boosting the number of high-margin luxury vehicles like the 7 series, and broadening the range of M performance-branded cars.
At the same time, BMW is looking at streamlining its portfolio of cars to focus on the most profitable models.
"We will take a hard look at both variants and equipment options," chief financial officer Friedrich Eichiner said, explaining that this helped reduce complexity in development, production and after-sales. Mini has reduced the range of its models to five, cutting three variants.
This new, simpler production method will help achieve savings of more than €100m over the coming years, BMW said.
Reuters
Picture: REUTERS
MUNICH — German car maker BMW says it will focus on electric vehicles and automated driving and develop its software and technology services as part of a new strategy for the 100-year-old company.
The emergence of rivals including ride-sharing company Uber and technology group Alphabet, which has developed its own self-driving car, has prompted BMW to rethink its traditional strategy of selling large, powerful, luxury cars.
"We are leading BMW Group into a new era," CEO Harald Krueger told journalists at BMW’s annual results news conference.
"To this end we leverage innovative technologies, comprehensive connectivity and zero-emission mobility. All of these need to be industrialised, bearing in mind our business responsibilities, and in a sustainable manner, which in itself is another great challenge," he added.
BMW Group aims to achieve a pretax margin of at least 10% from 2017 to 2020 by pushing digital connectivity, autonomous cars and developing businesses including motorcycles.
Shares in BMW rose 3.7% to €82.48 by 9.37am GMT on Wednesday, outperforming a 2.1% rise by the STOXX Europe automobiles index.
New technologies have created opportunities for the automotive industry, forcing the Bavarian carmaker to evolve its business beyond mechanical engineering towards becoming a software and technology company.
"The value creation is shifting from the actual hardware toward software and services," Mr Krueger said.
BMW said it would focus on developing the businesses of high-definition digital maps, sensor technology, cloud technology and artificial intelligence.
BMW will also push services including providing wall-mounted electric car charging boxes and software programmes to help drivers find a parking space with its ParkNow and ChargeNow services.
In addition, it will seek to maintain the high profitability of its cars business by boosting the number of high-margin luxury vehicles like the 7 series, and broadening the range of M performance-branded cars.
At the same time, BMW is looking at streamlining its portfolio of cars to focus on the most profitable models.
"We will take a hard look at both variants and equipment options," chief financial officer Friedrich Eichiner said, explaining that this helped reduce complexity in development, production and after-sales. Mini has reduced the range of its models to five, cutting three variants.
This new, simpler production method will help achieve savings of more than €100m over the coming years, BMW said.
Reuters
Change: 1.19%
Change: 1.36%
Change: 2.19%
Change: 1.49%
Change: -0.77%
Data supplied by Profile Data
Change: -0.19%
Change: 0.69%
Change: 1.19%
Change: 0.00%
Change: 0.44%
Data supplied by Profile Data
Change: 0.62%
Change: 0.61%
Change: 0.20%
Change: 0.44%
Change: 0.12%
Data supplied by Profile Data
Change: -0.21%
Change: -1.32%
Change: -0.69%
Change: -0.51%
Change: 0.19%
Data supplied by Profile Data