MAJOR changes are on the way for the auto mobility industry, as it goes through more shifts and trends in the next decade than were experienced in the past three. BMW is an interesting case study of a century-old company transforming itself into a hi-tech company.
Hildegard Wortmann, senior vice president, Asia-Pacific region, BMW Group, says the brand’s approach shows how a more than 100-year-old company can transform into a new and exciting entity. And its success at transformation is a testament to the company’s strong leadership and brand vision, made real through a strong strategy.
“We came from a long legacy – the BMW brand is over 100 years old. Now we are transforming into a hi-tech company, and the transformation is really exciting. BMWi, launched in 2012, reflected a strong visionary view on what needed to be done, what needed to be explored. It shows what the premium brand should be – it is not just a product, but also about the leadership and strategy,” said Wortmann.
The key strategy driving BMW’s transformation is to stay relevant, and that means to have a really good understanding of where the market is going and what most customers want, what is the trend and what needs to change, she says.
“Importantly, it needs to have the strong capability to reflect on yourself, your business, your product portfolios and adapters. It takes a lot of conscious decisions and courage, because sometimes you have to let go. And a heavy financial investment, several billion euros every year spent in research and development into future technologies,” said Wortmann.
Electrification was the first recent major disruption, said Wortmann, and BMW has become a pioneer in electric mobility.
For example, it launched the BMWi3 in 2012, and now has 200,000 customers driving electrified BMW’s – either all-electric vehicles or plug-in-hybrids.
“In Thailand, our electrification share is also about 20 per cent, and that is a very good share. By the year 2025, you will see 25 per cent driving electrified BMWs, so that is strong commitment to electrification,” said Wortmann.
“The whole of Asia Pacific is a fantastic region for BMW, it is very promising in terms of growth and business development. And when we look specifically at Thailand, we have seen a fantastic growth rate here for us, an over 20 per cent increase from last year.
“I am confident that my team will continue this growth rate throughout the year.”
Another area of technological disruption is autonomous driving, where the company is developing a variety of technologies. There are many steps to get to totally autonomous autos, Wortmann added, but already there are autonomous functionalities found in their cars.
“It is not yet completely autonomous, but a lot of driving assistants systems allow you to take your hands off, your eyes off, and you can already drive and park on autonomous.
For driving fully autonomous – it will take a little more time. But it is not so much, because the technologies can be developed and our engineers are on top on this. But of course, you need a lot of frameworks to go with that, such as regulations and insurance,” said Wortmann.
Ramping up investments
BMW has just opened a large campus north of Munich, with over 3,000 specialists to develop autonomous driving, a heavy investment in speeding up the future of mobility.
The company sees a future that incorporates many new mobility functions into autos.
“I do not believe that the car will go away, I do not believe that individual mobility would go away, but rather it will remain important. People love to own their own cars, but they can choose now. They can drive their own car or use a rental car; they can use ride sharing – whatever they want. It is just the pressure of more choices,” said Wortmann.
For example, the BMW Drive Now, which has gone through testing, can already boast a million customers worldwide. Meanwhile, Charge Now, is the largest infrastructure of its kind with 118,000 charging stations already.
“We are continuing in our development work,” she said.
DriveNow is a flexible car-sharing service from the BMW Group, giving customers the opportunity to rent cars spontaneously when and where they need them.
“Currently, we have this service in 13 cities worldwide. We are looking into all the different markets worldwide to explore further,” said Wortmann. Successful cities must meet the company’s criteria.
“When we looked to launch Drive Now in Munich, one of the most important things was to negotiate with the city’s government for parking space.
“To give customers really good service, we need for the whole city to have free parking available. You need infrastructure and parking and operating licences and so on. There are a lot of things to be considered,” said Wortmann.
She said she sees a big opportunity for BMW in the Drive Now ride-sharing service, because it is the perfect way to get new customers to try a certain model. For example, some people might not have been thinking about the BMWi3 at all, but because they book a car-share, they get into a BMWi3. It becomes like a test drive, in which people can try out a model, and that presents BMW with an excellent opportunity.
“Customer can enjoy our brand and we can convince them to get into the brand. They might be young customers who might not have money yet to buy one, but they might go for some car later on. It is about the brand, that we really want to show that we are up to date and understand what customers really want to have.
Mobility service is a customer demand for BMW, and we have to deliver the services,” said Wortmann.
Partnerships
A lot of the key factors that BMW builds into their cars come from the larger high-technology environment.
The carmaker cooperates with others, such as Mobieye, Delphi and Intel. It needs to partner with tech companies in order provide customers with a great in-car experience, for example on the displays, connectivity and connected services in the car.
It also makes sure that it has all the hi-tech equipment in the car that customers expect.
Partnership are also important locally, with BMW Group Thailand having set its sights on another milestone in this country’s journey towards a future of electro-mobility. BMW is involved with a local high-voltage battery production facility, comprising the battery modules and the battery itself. Production begins in 2019 at a new production facility in WHA Chonburi Industrial Estate 2.
The company has 30 plants in 14 countries and has a strong commitment to production in Asia region, said Wortmann.
“The ultimate goal is always to keep maximum capability with flexible costs and labour force capacity. We maximise the production network in order to make sure we can have flexibility, but also to optimise for the best tech benefits through incentives and opportunities. For example, we use our plant in Rayong to support the China market.”
Christian Wiedmann, president, BMW Group Thailand, said that together, BMW Group and Draxlmaier plan to invest over Bt400 million to establish a new beacon for e-mobility innovations in Thailand and the region.
“For BMW Group Thailand, we have already planned and been approved for government incentives by Thailand’s Board of Investment (BoI) to further invest over
Bt700 million for more BMW Plug-in Hybrid models to come,” Wiedmann said.
