D+ACES equals future driving pleasure. That’s the equation that guides the BMW Group’s future strategy, and connects the various offerings on display by the automaker’s three car brands at IAA Cars 2019, the biennial Frankfurt motor show. The acronym puts a typical BMW twist on a near-standard industry term, adding Design to Automated driving, Connectivity, Electrification and Services.
The BMW Group’s future model range and corporate strategy will be influenced by D+ACES as the Bavarian automaker develops a new generation of vehicles on platforms flexible enough to accommodate a range of propulsion options, ready to meet the challenges of future mobility.
The significance of BMW’s flexible propulsion strategy is clear: comments from Klaus Fröhlich, the automaker’s board member for development, that, “The shift to electrification is overhyped,” underline the automaker’s decision to take a more cautious approach to next-generation powertrain technology.
In 2018, BMW Group’s worldwide car sales rose by over 1% to almost 2.5 million units, with production up by nearly 1.5%, to over 2.5 million units. The company attributes its success to its largest ever model offensive across the BMW, Mini and Rolls-Royce car brands
According to Jonathan Storey, author of a new Automotive World report on the BMW Group, “Some will see this comment as being out of touch, a reluctance by a legacy automaker to move with the times, but I disagree. The key to BMW’s approach is that it is preparing to move with the times, but will keep the flexibility to compete effectively under all plausible scenarios, and not just the one that dominates today’s headlines.”
BMW claims to be a leader in electrified vehicle production, and has set itself a target of one million electrified vehicle sales by 2021. This distinction—electrified, rather than electric—is significant; an early mover in battery electric vehicles (BEVs) with the i3, BMW soon experienced a widening gap between the high praise it received for the technical superiority of its dedicated BEV, and customers’ low levels of enthusiasm on the forecourts when it came to sales.
As a result, the company’s focus is on developing a broad range of powertrain offerings, from combustion engines via hybrids to battery electric vehicles (BEVs) and hydrogen fuel cell cars, as exemplified by the X5-based ‘i Hydrogen NEXT’ concept unveiled in Frankfurt.
An early mover in battery electric vehicles with the i3, BMW soon experienced a widening gap between the high praise it received for the technical superiority of its dedicated BEV, and customers’ low levels of enthusiasm on the forecourts when it came to sales
Crucially, notes Storey, BMW Chief Executive Oliver Zipse—barely a month into the role after replacing Harald Krueger—is fully signed up to the flexibility philosophy. “While Zipse’s experience as head of production bodes well for this component of BMW’s strategy, he needs also to establish and implement clear plans for the development of software and services like car-sharing.”
At the IAA, Zipse spoke of the need to assess which propulsion technologies have the greatest leverage to reduce global greenhouse gas emissions, whilst also emphasising the importance of consumer choice: “The car buyer should continue to have the choice and be able to decide for himself”, he said.
A number of megatrends will significantly influence every automaker’s strategy, but BMW’s decision to add ‘D’ for design is of particular interest, as the automaker believes vehicle design will be significantly affected by automation and electrification in particular. According to Mini designer Thomas Sycha, electrification will alter vehicle proportions, and improve aerodynamics; automation will have a similar effect, he has said, with future vehicle appearance—externally and internally—being notably influenced.
BMW’s hope that consumer choice guides powertrain decision-making may increasingly be challenged by incentives, penalties and regulation
Recognising that the development of solutions for next-generation mobility requires a collaborative approach, BMW has entered into a number of partnerships. It was an early mover in the German automaker consortium that invested in HERE, a move designed to maintain automaker control over mapping in response to growing competition from Silicon Valley. It is a signed-up member of Ionity, the European high-power charging network for electric vehicles, that also includes Daimler, Ford, Volkswagen Group, and recently, Hyundai and Kia. And in a move that underlines the challenges associated with creating innovative future mobility solutions, BMW partnered with rival Daimler on car-sharing, ride-hailing, parking, charging and multimodality. Since 2013, its fuel cell technology has been developed in partnership with Toyota, and in the summer of 2019, it established a collaboration with Jaguar Land Rover on electric drive units (EDUs).
From the future to the present, and the numbers that enable the automaker to invest in its future are strong. In the first six months of 2019, the company reported record BMW Group sales for the first half of a financial year, results which came off the back of new annual sales and production records for an eighth consecutive year. In 2018, BMW Group’s worldwide car sales rose by over 1% to almost 2.5 million units, with production up by nearly 1.5%, to over 2.5 million units. The company attributes its success to its largest ever model offensive across the BMW, Mini and Rolls-Royce brands.
Looking ahead, notes Storey, “We expect this flexible approach to enable the company to increase its output from 2.54 million units in 2018 to 2.81 million by 2023.” Forecasting what will fuel those 2.81 million units, however, is a very different matter, and BMW’s hope that consumer choice guides powertrain decision-making may increasingly be challenged by incentives, penalties and regulation.
Automotive World’s report on the BMW Group is available now. Download a copy here: Strategy update: BMW Group – 2019 edition