How can German manufacturers hold their own in the technological era?

The century-old luxury car manufacturer BMW has recently made frequent moves:

In May, it announced that the plug-in hybrid version of X1 will be launched in 2016.
In May, it announced that the new hybrid sports car i8 is expected to be officially released in the fourth quarter of 2017.
In May, it invested in Scoop Technologies, a travel service company in California, USA.
In June, it carried out a strategic transfer of the “i” department.

What does all this imply? Let’s join Xiaodian to carefully taste how BMW will meet the competition in the era of technology in the next 20, or even 100 years.

The plug-in hybrid version of X1 will be launched in 2016

As one of BMW’s important models, the hybrid version of X1 will be available as soon as this year. Along with the announcement of the launch, its spy photos taken during road tests have also been circulated.

In terms of appearance, from the exposed photos, the new plug-in hybrid version of X1 looks almost identical to the standard gasoline version of X1, with only minor differences. In terms of height, the plug-in hybrid version of X1 is lowered by 11 millimeters compared to the standard gasoline version, probably due to the equipped engine and motor changed the chassis design, thus lowering the height of the car body.

In terms of power, the new X1 will be equipped with a newly developed plug-in hybrid system composed of BMW’s new 1.5-liter inline three-cylinder turbocharged engine, a motor with a nickel-cobalt-manganese lithium-ion battery with a capacity of 7.7 kilowatt hours, and a 6-speed automatic transmission. The maximum power of the electric motor has not yet been announced, but the declared information shows a comprehensive fuel consumption of only 1.8 liters per 100 kilometers.

i8 is expected to be officially released in the fourth quarter of 2017

It is reported that the cool hybrid supercar i8 will be released in the fourth quarter of next year. To give everyone a sneak peek, the spy photos taken during the road test are released. The technological sensation of the i8 stands out from the crowd.

Like X1, the new i8 has only been adjusted in some details compared to the current i8. The most obvious change is the addition of a ventilation design on the rear trunk cover of the new car. However, this test car is likely to be a shell of the current model for testing, and it is believed that the official version of the new i8 will be upgraded in more details in the future.

In addition, the new i8 is equipped with a racing-grade UK AP RACING braking system, which means that its power and performance will be higher than the current i8 on sale.

In terms of power, the new i8’s power system will be more powerful, and the maximum comprehensive power will be increased to 426 horsepower. At the same time, the 6-speed automatic manual transmission will be further optimized. In addition, it will also be equipped with a larger capacity battery pack, which will make the new i8’s endurance performance even better.

Finally, let me tell you secretly that BMW has already spent more energy on the new i5, which will be more popular and will be released in 2016. The i series will continue to expand.

Comprehensive layout of the travel field

Many car brands are laying out the travel industry, including BMW. BMW has a dedicated investment fund called BMW i Ventures, which has recently been very active in the travel industry investment.

Recently, BMW invested in a travel service company called Scoop Technologies in California, USA. Last August, the company launched an APP called “Scoop”, which is committed to providing carpooling services for office workers in the San Francisco Bay Area. One of its biggest features is to allow office workers to arrange their travel plans in advance. If there are spare seats in the vehicle, they can be shared with others to share time, share costs, and save the environment.

However, BMW did not disclose the specific amount of investment. We only know that it was one of the contributors to Scoop’s seed funding of $5.1 million.

In fact, Scoop is not the first company that BMW has invested in in the travel industry. Earlier, BMW had invested in five other companies in the travel industry:

> Summon, committed to providing taxi services

> RideCell, committed to fleet management

> Zirx, committed to providing parking information

> Moovit, committed to providing public transportation system information

> Zendrive, committed to providing guidance for safer driving

Reorganization of the i department is consistent with the prediction of the Internet QueenDo you remember the previous article about the “Internet Queen” predicting what future cars will look like in a 26-page PPT presentation? She predicted that the development trend in the car industry will shift towards self-driving cars.

After the release of this highly anticipated report, on June 3rd, a director from BMW revealed that the company’s “Project i” division is shifting its focus from the development of electric vehicles for personal use to self-driving cars. For this department, it represents an important strategic shift.

Prior to this adjustment, there was a lot of turmoil within the “Project i” division, with at least four high-level project managers leaving one after the other to join Chinese electric vehicle start-up companies such as “Harmony Futeng”. Now, the restructured “Project i” division is in a period of growth, and BMW calls this stage “Project i Next.”

In order to accelerate the research and development of self-driving cars, BMW is recruiting experts in machine learning and artificial intelligence. In addition, it will integrate its existing computer-assisted driving systems, such as cruise control, emergency braking, lane-keeping support, and automatic parking, into these cars.

According to BMW director Klaus Fröhlich, with fully automated vehicles, BMW can launch ride-sharing services without having to pay drivers. This business could enhance BMW’s competitive advantage with new ride-hailing service companies like Uber, and reduce the erosion of vehicle sales profits caused by these emerging companies through more convenient and effective vehicle utilization.

In addition, Fröhlich believes that China may become the first market where self-driving cars appear in large numbers. After all, China is already the world’s largest car market, and last year, more electric cars were sold in China than in all other markets combined.

It seems that in the future, China’s electric car market is going to be very crowded with tough competition. Little Dian is very pleased with this.

First strategy: From service to digitalization

After learning about BMW’s recent moves, let’s explore the deeper meaning behind these actions.After stable occupying the top spot of the global luxury car market for 11 years, BMW has put forward a new “First Strategy” with transportation as the core, emphasizing six strategic directions: brand & design, product, technology, consumer experience & service, digitalization, and profitability.

❶ In terms of the brand, besides the product brand, more emphasis will be placed on the BMW Group. In terms of design, BMW will become more emotional, launching emotional designs that focus on appearance and internal communication with customers. Obviously, user experience and interaction design have gradually become the focus of new product creation from different car manufacturers.

❷ For the product, BMW mentions two focuses:

Undoubtedly, electric and hybrid cars will be the focus, expanding the i brand product lineup. By 2026, BMW will also add an i NEXT to this series – a high-end car model that encompasses all of BMW’s latest trends in advanced technology and design.
Expand the M brand, including new car models such as the BMW M2 Coupe, BMW M4 Competition Package, BMW M4GTS, BMW M760LixDrive V12 Excellence, and BMW M760Li Xdrive. In addition, M sport models will be expanded to all models. M series will become one of BMW’s future profit growth points.

For the MINI brand, hybrid car models will also be launched in the future, but the number of its models will be reduced by 3 to 5.

❸ In terms of technology, it mainly reflects in:

In terms of power technology, BMW plans to develop the electric motor to the fifth generation by 2020, as one of the three core components, now using the third-generation electric motor. In addition, BMW is also leading in the research of fuel cells. The maximum power of the new i8 can reach 426 horsepower, which has proved this point very well.
In terms of intelligent interconnection technology, BMW will focus on several key technology fields, such as high-precision digital maps, sensor technology, cloud technology, and artificial intelligence. Currently, by investing in HERE map business, BMW ensures the advantage of high-precision maps.

### 4. Emphasizing on the consumer experience and services aspect, the service industry is expected to become BMW’s pillar industry. Besides being able to provide high-end products persistently, it is also an excellent provider of personal travel solutions. No wonder, BMW has frequent investments in the travel field.

5. Regarding the profit aspect of the layout, from 2017 to 2020, BMW plans to mainly focus on the three major sectors of automobiles, motorcycles, and financial services:

For the steady development of the automobile business, BMW hopes to increase its pre-tax profit by at least 10%.
For the motorcycle business growing at the fastest rate, BMW hopes to achieve a small increase – the pre-tax profit margin reached 8%-10% in 2017, and BMW will make more investments in this area to explore development potential.
It is reported that BMW’s financial services have significant advantages in the industry. Therefore, BMW hopes that the equity return rate of the financial business department can achieve growth of 18%.

6. Digitization is the most important strategy for BMW in the future, which includes three aspects:

Digitization of business processes (management), including development, production, and sales.
Winning customers through digitization.
Digitization of product services, such as through artificial intelligence, BMW’s technology and products will learn to anticipate customer demand and provide personalized, customized service solutions based on it.

Compared with other car brands, BMW still has its absolute advantages. However, from the direction of the latest strategy and product releases, it can be seen that BMW is a little anxious.