Last paragraph is a huge acknowledgement of quality issues.
From The Car Connection:
BMW's Panke Says Change is the Constant
Considering last year's strong sales numbers, you might expect to see BMW Chairman Helmut Panke claiming the last laugh on his critics. For the first time, BMW volume broke through what Panke called the "magic sound barrier" of 1 million last year. And the German executive is optimistic that with a new 3-Series launching production, along with a spate of other recent entries, the numbers are likely to grow again in 2005. There's been plenty of criticism of BMW's new design theme and its sophisticated — some prefer complicated — iDrive system, "but still the customers keep buying the cars. What does that tell us?" asked Panke. "We should continue doing what we're doing."
Well, not necessarily. The look of the all-new, fifth-generation 3-er is decidedly less edgy than the 7-Series, which launched BMW onto a new design direction. "We've balanced some of the lines, some of the proportions," acknowledged Panke, during an after-dinner discussion. There's also a significantly updated iDrive, and customers can, in fact, opt to leave out that high-tech system entirely. There's no question that BMW has taken all the recent criticism to heart. But don't expect it to shift to a conservative operating strategy. Creativity and technology will remain essential hallmarks of the Bavarian automaker's strategy, stressed Panke.
Much of BMW's growth has come, in recent years, from its entry into all-new and emerging product segments. "We will not stop our product offensive," said Panke, promising to continue to "bring new models out there." A challenge is to find new niches that don't cut into demand for existing BMW products, but that instead add to incremental volume. The automaker was one of the first to market with a luxury SUV, or as Panke prefers to call the X5, a "sport-activity vehicle." And he subtly hinted that there may be still more opportunities in that mold.
The explosive growth "of the classic SUV is over," Panke declared. Body-on-frame SUVs aren't dead, but customers, especially in the critical U.S. market, have been shifting to car-based crossovers. Early versions were designed to look like conventional sport-utes, but going forward, crossovers are likely to make their own, unique design statements, added Panke, pointing to the hard-to-categorize Infiniti FX45.
The German carmaker's good fortunes were not limited to the BMW brand last year. It continued to score well with its British Mini marque, which has continued to struggle to meet surging global demand. Panke said the company continues to seek ways to break production bottlenecks and boost output at Mini's Oxford assembly plant. But he said there are no plans to add a second plant. "Mini wil grow in Oxford and we…have no plans to go elsewhere."
For the moment, at least, BMW also has no plans to add a second assembly plant in the U.S., its single largest market. Instead, Panke suggested, small but steady steps will be taken to boost capacity on the Spartanburg, S.C., line.
BMW's continuing success has surprised some skeptics, not only because of the polarizing design of products like the 7-Series, but because of recent quality problems. Panke admitted that is a serious concern. "We need to have a quantum leap in the quality of all our vehicles," with the goal of being at least in the top three brands according to J.D. Power & Associates reports, such as the Initial Quality Survey. Many of BMW's recent problems stem from snags with new technology, such as the iDrive. "Our challenge," concluded Panke, "is to have innovation and reliability. We will not take innovation out" of BMW products. —Paul A. Eisenstein
From The Car Connection:
BMW's Panke Says Change is the Constant
Considering last year's strong sales numbers, you might expect to see BMW Chairman Helmut Panke claiming the last laugh on his critics. For the first time, BMW volume broke through what Panke called the "magic sound barrier" of 1 million last year. And the German executive is optimistic that with a new 3-Series launching production, along with a spate of other recent entries, the numbers are likely to grow again in 2005. There's been plenty of criticism of BMW's new design theme and its sophisticated — some prefer complicated — iDrive system, "but still the customers keep buying the cars. What does that tell us?" asked Panke. "We should continue doing what we're doing."
Well, not necessarily. The look of the all-new, fifth-generation 3-er is decidedly less edgy than the 7-Series, which launched BMW onto a new design direction. "We've balanced some of the lines, some of the proportions," acknowledged Panke, during an after-dinner discussion. There's also a significantly updated iDrive, and customers can, in fact, opt to leave out that high-tech system entirely. There's no question that BMW has taken all the recent criticism to heart. But don't expect it to shift to a conservative operating strategy. Creativity and technology will remain essential hallmarks of the Bavarian automaker's strategy, stressed Panke.
Much of BMW's growth has come, in recent years, from its entry into all-new and emerging product segments. "We will not stop our product offensive," said Panke, promising to continue to "bring new models out there." A challenge is to find new niches that don't cut into demand for existing BMW products, but that instead add to incremental volume. The automaker was one of the first to market with a luxury SUV, or as Panke prefers to call the X5, a "sport-activity vehicle." And he subtly hinted that there may be still more opportunities in that mold.
The explosive growth "of the classic SUV is over," Panke declared. Body-on-frame SUVs aren't dead, but customers, especially in the critical U.S. market, have been shifting to car-based crossovers. Early versions were designed to look like conventional sport-utes, but going forward, crossovers are likely to make their own, unique design statements, added Panke, pointing to the hard-to-categorize Infiniti FX45.
The German carmaker's good fortunes were not limited to the BMW brand last year. It continued to score well with its British Mini marque, which has continued to struggle to meet surging global demand. Panke said the company continues to seek ways to break production bottlenecks and boost output at Mini's Oxford assembly plant. But he said there are no plans to add a second plant. "Mini wil grow in Oxford and we…have no plans to go elsewhere."
For the moment, at least, BMW also has no plans to add a second assembly plant in the U.S., its single largest market. Instead, Panke suggested, small but steady steps will be taken to boost capacity on the Spartanburg, S.C., line.
BMW's continuing success has surprised some skeptics, not only because of the polarizing design of products like the 7-Series, but because of recent quality problems. Panke admitted that is a serious concern. "We need to have a quantum leap in the quality of all our vehicles," with the goal of being at least in the top three brands according to J.D. Power & Associates reports, such as the Initial Quality Survey. Many of BMW's recent problems stem from snags with new technology, such as the iDrive. "Our challenge," concluded Panke, "is to have innovation and reliability. We will not take innovation out" of BMW products. —Paul A. Eisenstein