PARIS – BMW’s new 3 Series, unveiled here this week, will be the first big test of the carmaker’s strategic move away from being a maker of premium performance vehicles to becoming a hardware and software company.
- New sedan boasts a range of connected technologies and assistance systems to meet the needs of a new generation of customers.
- Munich insists 3 Series still represents the BMW brand like no other car and is “truly the heart and soul of BMW”
- Company denies it is in a battle over ownership of customer data with its dealers
The 3 Series is important because it is is the core BMW model with more than 15 million sold in the past 40 years. It is the most successful BMW ever and, says chief technology officer Klaus Froehlich, “it represents the BMW brand like no other car and is truly the heart and soul of BMW.”
But whereas the engine and the car’s handling were for decades its main selling points, the new 3 Series boasts a range of connected technologies and assistance systems that meet the needs of a new generation of customers and puts the car on course for an ever more automated driving experience.
“Of course BMW buyers still come in for performance,” said sales and marketing boss Pieter Nota, “but we know that the connectivity element is increasingly a purchase criterion.”
Nota, who joined BMW from Dutch health technology group Philips last year, says the need for connectivity is clear. In China, more than 60 pc of potential car buyers would opt for another brand if it offered better connectivity, he says. And company research shows that roughly half of all BMW customers would consider switching brands if better personal assistant technology could be found elsewhere.
“There’s lots of evidence that the purchase criteria are shifting from sheer road handling to the connectivity elements,” Nota told a small group of reporters during the Paris Auto Show.
The “Intelligent Personal Assistant” is one of the highly touted innovations that addresses customers’ new requirements in the 3 Series. Froehlich said the assistant “brings our digital world into the car as your personal companion. And he added: “It connects you and makes your life easier, including the latest driver assistance systems.”
In coming years, BMW hopes to start making money with a growing range of digital services and in-car functions that can be updated or switched on over-the-air. But in the near term, the carmaker sees digital functionality primarily as an essential way to improve BMW models.
Said Nota: “First and foremost, the money is in making the BMW as attractive as possible for the customer; earning money from services will come at some later date.”
BMW is already making use of customer data for financial gain, specifically through a program Nota defined as “post-purchase upselling.” This involves offering BMW buyers relevant add-on options after they have already decided to purchase a particular car. What is offered to whom is determined on the basis of advanced data analytics.
“We already have evidence that we can add hundreds of euros of value to a single order,” he said.
Nota played down notions that BMW and its dealers, like other carmakers, are engaged in a battle over the ownership of customer data, saying that recently signed retail agreements with European dealers address the issue.
“We have signed Europe-wide new contracts,” Nota said. “We want to share customer data with dealers; we want to both have access.” He added that the agreements will help grow overall sales to the benefit of both BMW and its dealerships.
Nota also said the growing importance of digital service options and over-the-air updates will require dealers to move beyond their core business of selling cars.
“We will find different ways to incentivize and pay our dealers,” Nota said. “In the past, they were paid primarily for direct sales and after-sales, but in future we also want to involve the dealer financially in OTA and other new business areas.”
-By Arjen Bongard