Yes, the headline is a bit of a tease and quite unthinkable, of course. Or maybe…?
Here’s the problem:
BMW’s strategy is in a dark place of the past, based on some board-level shenanigans.
- They have announced that they are only planning for a maximum of 15% of their vehicles to be BEVs or PHEVs by 2030.
- They have potentially catastrophic under-investment in batteries: they only have forward contracts for USD$1.7 billion in batteries to supply electrified vehicles in the next few years (compared with VW’s USD$40 billion)
- They include PHEVs in their strategy. (Others will cease to manufacture PHEVs for most uses because the duplicated powertrains are expensive and redundant. Only BEVs will sell in volume.)
- Continuing commitment to a legacy dealer-sales model. Dealers are terribly expensive ways to sell stuff. Amazon is pretty good at selling stuff online, as is Tesla which usually has only one, fully-owned, showroom/test-drive-launchpad per city, typically in a shopping centre; Tesla encourages buyers to order online.
Is the power of franchised dealers a drag on BMW’s strategy/survival? In fact, is that a fundamental difference in philosophies between the old guard and the new world; i.e dealers selling to prospects v buyers buying online?
Bede Doherty is an independent consultant in climate change mitigation, specialising in transport including fuels/powertrains, fuelling infrastructure and emissions.