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Despite the current challenging economic times, the BMW Group is sticking to the long-term targets set out in its Strategy Number ONE.

"2009 will be a transitional year for which we cannot yet make any reliable forecasts. Nevertheless, our long-term profitability targets for 2012 remain intact. We want to preserve the independence of the BMW Group," said Chairman of the Board of Management of BMW AG Norbert Reithofer at the Annual Accounts press conference in Munich.

The BMW Group's current assumption is that sales volumes will decrease by 10% to 20% in automotive markets over the course of 2009. Reithofer expects the economy to pick up in 2010: "At that point we will also gain additional momentum from our renewed product range. The ramp-up of our highest-volume models between 2010 and 2012 will reinforce this trend."

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Automotive Industries (AI) asked BMW Chief of Development Dr. Klaus Draeger how the BMW group was responding to the ongoing market weakness.

Draeger" We are using the flexible structures we have set up throughout the BMW Group to bring production volumes into line with demand and to avoid increases in inventory levels. Alongside production volume reductions, we will also be working to reduce working capital with the aid of targeted receivables management. This will also have a positive impact on free cash flow. We are currently in the process of reducing material and fixed costs. We have already seen the first signs of success in 2008. We will also continue to work on lowering the cost base for fixed costs. The BMW Group expects the entire industry's global sales to drop by 10% to 20% in 2009. We expect automotive business to pick up over the course of 2010.

AI: What are you doing to help suppliers?

Draeger: The economic crisis causes problems for many suppliers, including important ones. Therefore, we are monitoring the situation very closely and we have expanded our risk management team that takes care of those suppliers. We try to identify problems as soon as possible. In cases where a supplier is getting in trouble, we have established processes to support.

Thereby we assure that our production is not cut off. Basically we try to avoid getting too engaged, because we want suppliers to be competitive on their own. Monetary help or engagements will always be an exception to overcome a short term problem. We can give advice concerning optimizing the processes, restructuring or consolidation. We are also working closely together with the purchasing departments of our premium competitors to support suppliers that are in trouble or that soon could be in trouble.

AI: What is the role of the suppliers in BMW success?

Draeger: Our suppliers play a very crucial role for our success. On one hand they are our partners for innovative developments, on the other hand they are important for analyzing potential cost cuttings. Together we are optimizing our supply chains, production processes and quality.

AI: There is a lot of speculation about your cooperation with Mercedes, Fiat and Peugeot. When will we see the results?

Draeger: The discussions with Daimler have not yet been concluded. Talks with Fiat are ongoing. After careful consideration we did establish that cooperation between the MINI and Alfa Romeo brands on a possible joint platform would be pointless. Our talks with Fiat will now focus on other areas. We successfully cooperated with PSA on engine production.

AI: What prompted BMW to create a brand new vehicle segment with the BMW 5 Series Gran Turismo?

Draeger: We see a growing customer group, looking for a car which combines the status and comfort of a luxury sedan with the versatility and higher seating position of an SUV. All this in an elegant body, inspired by traditional Gran Turismos.

AI: What are the technical differences from the present 5 Series?

Draeger: Since body concept and also major powertrain parts will be new, the car has nothing in common with the current 5 Series.

AI: Which locations are considered for production?

Draeger: The BMW 5 Series Gran Turismo will be produced in our Dingolfing plant. It will add to our existing production program which consists of all BMW 5, 6 and 7 series models.

AI: Can we expect driver assist systems such as the 7 Series night vision in the new 5 Series Gran Turismo?

Draeger: We will see all systems in the 5 Series Gran Turismo which we know from the 7 Series already.

AI: When can we see the arrival of the X1 on the market?

Draeger: We will launch the X1 at the end of 2009.

AI: What would the X1 offer on the technical level?

Draeger: It's too early to talk about detailed technical aspects. But you can expect that the X1 will offer the same technical level as the BMW 1 series or 3 series.

AI: What are your plans for production of the X1?

Draeger: The BMW X1 will be produced in our Leipzig plant. It will complete our Leipzig production program consisting of BMW 3 series sedan, 1 series three door hatch, coupe and convertible.

 AI: What are the next steps in BMW's EfficientDynamics program?

Draeger: BMW is leading the competition in the EU because of EfficientDynamics. We are already there where others would like to be. Next steps will be for example, a new technology for substantially better efficiency, an eight-speed automatic transmission, the thermoelectric generator. Not to forget about the first BMW hybrid models.

AI: How does the new 8-speed automatic transmission compare to the dual clutch transmission?

Draeger: With the 8-speed, comfort, efficiency and response will be on a level never reached before with an automatic transmission. We will introduce it step by step top down the model line, whereas the double clutch is focused very much on the sport-driver's requirements in limited segments. Also, only the double clutch is capable of high rewing engine concepts so far.

AI: How closely did you work with ZF on the 8-speed automatic transmission and what results do you expect in terms of volume production?

Draeger: We are looking back to quite a long and successful partnership with ZF in the past. The new 8-speed is the latest result of our intense and close cooperation in terms of development work. We are enjoying launching this latest cutting edge technology now together with ZF.

AI: Which models will get the 8-speed automatic transmission?

Draeger: We will introduce the 8-speed automatic following a top-down approach. We have announced already that the 7 Series ActiveHybrid will come with it. The car is due this year.

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BMW Concept 5 Series Gran Turismo

The BMW Concept 5 Series Gran Turismo has defined a new segment. BMW says the Concept 5 Series Gran Turismo combines elegance, space, comfort and variability. In a combination never seen before on any other car, the characteristic features of a prestigious sedan, a modern and versatile.

Sports Activity Vehicle, and a classic Gran Turismo are all united in th Concept Car. The BMW Concept 5 Series Gran Turismo is highly versatile: a flexible interior comprising the rear seats, the partition wall, and the luggage compartment allows the adjustment of the interior individually to personal requirements - from a separate luggage compartment, like in a sedan, all the way to a loading capacity of 1,650 litres or almost 58 cubic feet with the rear seats folded down. This flexibility is rounded off by a twopiece tailgate with separate openings for additional convenience.

 

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