BMW’s future more than high-performance suburban status symbols

BusinessWeek’s Chris Reiter publishes  a controversial, yet fascinating article about BMW’s future electric cars. Together with the Megacity vehicle story, this article also gives insight on BMW boss Dr. Norbert Reithofer — who was a previously underrated CEO but is now one of the most respected CEOs in the automotive industry. Here are some excerpts from Reiter’s article:

“The Megacity Vehicle is a must-have for BMW,” says Reithofer at the company’s landmarked headquarters in Munich.”

“Reithofer’s challenge is to secure a place for BMW in this new world without sacrificing its status as a rarefied drive for the open road. “We don’t see threats; we see opportunities,” says Adrian van Hooydonk, an 18-year BMW veteran whom Reithofer installed as design chief last year. “That’s an indication of how this company thinks and the kind of energy that Dr. Reithofer brings to the company. ‘It is what you make of it,’ that’s what he always says.”

“Inside BMW, the Megacity message didn’t immediately resonate with all of BMW’s horsepower-driven managers. Their resistance is understandable: BMW is doing quite well as is, building beautiful cars that go fast.”

“Because of its size, BMW can’t allow itself any mistakes,” says Stefan Bratzel, director of the Center of Automotive at the University of Applied Sciences in Bergisch-Gladbach, Germany, and a former manager at Daimler’s Smart unit. “If the Megacity Vehicle doesn’t work, BMW will have considerably less room to maneuver.”

“In 2005, it bested archrival Daimler’s (DAI) Mercedes-Benz in sales, and the company has come roaring out of the recession, expecting to sell 1.4 million vehicles this year, just off its 2007 peak, while raising margins to 6.6 percent. With both the trendy Mini badge and Rolls-Royce’s silver lady under BMW control, the Bavarian manufacturer is on more solid footing than at any time in its 94-year history.”

Dr. Reithofer: “In the U.S., I learned to take quick decisions and not hold long speeches,” he says. “When I got back to Munich, it struck me right away how long it took to make decisions, but we’ve changed that now.”

“Reithofer was very underrated when he came in, but he’s since become one of the most respected CEOs in the industry,” says Philippe Houchois, an analyst with UBS (USB) in London. “He’s not flashy but rather an inside guy who gets the work done.”

“Since we’re BMW, we don’t want to create just any old electric car,” says design chief van Hooydonk. “We want to deliver what people so far think is impossible: the combination of joy and zero emissions.”

“Perhaps the most daring part of Reithofer’s plan for the Megacity is that he expects to make money with the car, despite the use of costly materials like lightweight aluminum and carbon fiber.”

“I would have decided to produce the Megacity Vehicle even if, contrary to our expectations, it doesn’t make money in the first generation,” says Reithofer, who hasn’t been afraid to break with traditions such as adding front-wheel drive models to the BMW brand, exiting Formula 1 auto racing, and linking with rival Mercedes to save purchasing costs. “As a leader, you can either be an entrepreneur or an administrator. I see myself as an entrepreneur.”

Source: BusinessWeek