Author: Su Qin
A few days ago, we sorted out the “BMW Electrification for 50 Years” article, a brand that has been working on electrification for 50 years, which is quite difficult, showing BMW’s belief and support for electrification. However, if we look at BMW’s performance in the new energy market in China, it can be described as completely disastrous.
In China, will BMW be ruined by electrification after a century? Now, it depends on Gaul.
On April 20th, BMW released its new BMW 7 series and electrification product BMW i7. Gaul, President and CEO of BMW Group Greater China, said: “The engineering of the new 7 series is developed in Germany, while the design inspiration comes from China,” and “Today’s trends in China will lead the direction of the world tomorrow.”
With such remarks, Gaul’s emotional intelligence was beyond doubt.
Although i7 is the flagship of BMW’s pure electric products, as a member of the 7 series, it can only appear in the form of a “general”. Even if it becomes the focus of the whole field, the role of “monarch” still has to be played by the 7 series, which is a kind of regret.
In addition to i7, the brand-new i3 has also been released, and the pure electric models ix3, ix, and i4 of BMW have long been on the market. At the same time, BMW plans to invest in 26 new cars in the Chinese market in 2022, including main brands, electrified products, MINI, and motorcycles, and has great potential for penetration into every segment of the market.
As far as ix3 is concerned, BMW has recalled it four times for various reasons, and 2 series, 3 series, 5 series, 6 series, X3, X5, X6 have been recalled. A series of scandals, coupled with uncertain factors such as the chip crisis, the Russian-Ukrainian war, and the epidemic, have cast a heavy layer of fog on BMW, which is in the period of transition to electrification.
Start with the “Head”
The problem with BMW still needs to start with the “head”!
Gaul, the current President and CEO of BMW Group Greater China, is a German who has worked and lived in China for more than ten years. He joined BMW in 1999 and served as Vice President of BMW Group’s Greater China and BMW China Market from 2004 to 2009. Later, he went to the UK to serve as the General Manager of the MINI brand. He returned to China in 15 years and officially became the President and CEO of BMW Group Greater China on March 1, 18.
Gaul’s career has almost always revolved around brands.When Gao Lei took office in 2018, although BMW was not facing a survival crisis, it was suffering from the loss of global luxury car market sales champion to Mercedes-Benz and embarrassment in the face of the rise of domestic high-end new energy vehicles, policy changes, and industry changes in the Chinese market.
To address this, Gao Lei proposed the “2+4” strategy, which includes the BMW and MINI brands, and four strategies for automation, digitalization, electrification, and sharing – represented by A, C, E, and S. He also joined the Baidu Apollo program as a member of the board to promote the advancement of BMW’s autonomous driving technology.
At the 2020 BMW China Digital Technology Experience Communication Conference, Gao Lei defined the current luxury brand as “digital luxury.” Traditionally defined by exquisite interior and exterior design, luxury is gradually fading away, and digital luxury represented by digitalization and intelligence will become the unified cognition of consumers.
To keep up with the trend of digitalization, BMW established the LYNK & CO Digital Information Technology Co., Ltd. as early as 2019, fully prepared for BMW’s digital transformation and the creation of data loops and private traffic operations.
Although BMW’s efforts in the new four modernizations are evident, under Gao Lei’s leadership in recent years, it seems to be still holding on to Germany’s mechanical tradition and is reluctant to let go. The former radical, controllable, and young BMW now looks like an old scholar with reading glasses reciting ancient texts due to the shift from oil to electricity.
While there is overwhelming rhetoric online saying that BMW’s shift to electricity is no worse than products manufactured on pure electric platforms, even if it sounds convincing, in reality, it has been criticized and doubted by users, and cannot gain true “popular support.”
Gao Lei also recognizes the irreversible change in the luxury concept and the trend of the new four modernizations. However, whether it is product manufacturing or product release, BMW’s new energy products always play a supporting role, making people unable to understand why the i3 and i7, which should have sung the leading role or played a solo show entirely, cannot take center stage at the launch event.
In the past, BMW dominated the minds of Chinese consumers. Now, domestic car companies are taking the initiative to attack in the new energy race, and BMW has become very passive, especially with the world rushing towards electrification. BMW should not stubbornly cling to tradition, and Gao Lei should stop languishing and figure out what is important.
Will BMW Gallop Forward?
First, let’s look at a set of data.From 2018 to 2020, the BMW Group has invested over 15 billion euros in key technologies including product, technology, production, autonomous driving, batteries, and electric vehicles. In 2021, BMW delivered a total of 2,521,514 vehicles globally, and after five years, BMW finally surpassed Mercedes-Benz to become the world’s top luxury car brand. In China, BMW sold 846,000 vehicles, while Mercedes-Benz only sold 759,000 and Audi sold 700,000. Whether globally or in China, BMW is thriving.
However, surprisingly behind its impressive achievements, BMW only sold 48,000 units of new energy vehicles, mostly plug-in hybrid models in 2021, while the top three among new prominent players including Xpeng sold 98,155 units, NIO sold 91,429 units, and LI sold 90,491 units respectively. BMW has been defeated miserably! BMW, who has been riding high for a hundred years, never thought it would lose to new players who just started.
If BMW loses its defining power in the high-end new energy vehicle market in China, BMW’s motto of “For China, For the World” will be in vain. From the experience of Gao Le in China for over a decade, it is impossible for BMW not to understand the urgent situation in China. At the national level, clear completion times for carbon peak and carbon neutrality have been put forward, and at the consumer level, they are obviously less interested in traditional luxury brands.
Time is running out for Gao Le!
BMW proposed to occupy 15%-25% of the electric vehicle market by 2025, but produced pure electric models on the fossil fuel vehicle platform. This both forward-looking and backward-looking approach is not recognized by the market. All these phenomena indicate that although BMW values electrification products, they are not the top priority, very conflicting.
Now, BMW’s electric vehicle sales have been surpassed by new players. If BMW does not put the status of electrification products in the entire BMW family in order, it will be impossible to seize the target market share within three years, let alone lay a foundation for development in the electrification era.
Actually, the key to whether BMW can once again ride high is whether it can withstand the pain of transformation.
Gao Le once said, “We need to change the thinking patterns of the thousands and even tens of thousands of people.” Germany is the birthplace of the automobile, and BMW has deep roots in the German automobile tradition. They have created too many glories in the history of fossil fuel cars. Therefore, BMW’s transformation is not only about technology development but also emotional entanglement.And for a giant corporation like BMW, transformation is undoubtedly a very slow and difficult process, involving many issues from the supply chain to sales, from management to technology. Besides, although the automotive industry is facing a once-in-a-century transformation, fossil fuel vehicles will not disappear overnight. Therefore, emotionally and realistically, it is difficult for BMW to completely transform easily. This is probably also a thorny issue that the German big three are facing together.
In 2025, BMW will officially launch the “NEW CLASS” platform, which is a universal platform based on electrification, and can also produce fuel and plug-in hybrid vehicles. In the same year, BMW plans to deliver 2 million electric vehicles. In 2030, the year China plans to achieve carbon peak, the three major brands owned by BMW, Rolls-Royce, BMW, and MINI, will all be fully electrified.
Whether BMW’s achievements in the new energy market can match its brilliant performance in the field of fossil fuel vehicles depends on whether it can hone its skills over three years like Musashi Miyamoto!
Finally, there is a story to share. In Germany, there was a swordsman named Michael Huenner, who wrote a secret book on swordsmanship called “Swordsmanship 100 Moves”, in which the 100th move is the ultimate skill of the entire book—drawing a gun and shooting, the key is: “The times have changed, my friend!”
Let’s learn from Gao Le and BMW!
This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.