Robertson (c) shows the BMW X2 concept to Daimler boss Dieter Zetsche (l) at the Paris auto show (Photo: Arjen Bongard)
PARIS -- At the Paris auto show, BMW unveiled a variant of its i3 city car with an extended 300 km driving range. The premium brand also displayed an X2 concept. Ian Robertson, Â head of BMW Group sales and marketing, spoke to automotiveIT at the show about new mobility, the importance of car sharing and the need for a different kind of business approach in the auto industry.
There’s a lot of focus here on electric vehicles, yet these represent a minuscule part of the auto industry’s overall revenue today. That’s correct, but EV sales are increasing. At BMW, we are just about to sell more than 100,000 electric vehicles. And plug-in hybrid sales in the first three months were higher than in all of last year. By June, we had effectively exceeded the target we had originally set for the entire year.
And why is that?There are three reasons. One is that government incentives are very interesting for people. In Germany, now that there are some incentives, we’re seeing a spike in sales. People really like it when the government gives them something. Second, plug-in hybrids are hitting all the emission targets for these incentives. With third-generation hybrids, you’re driving electric almost all the time and you get the tax incentive on top. And third, we’re getting to the point where it’s no longer just the tech aficionados buying EVs. A lot of people see the incentives, realize that more people are buying electric cars and are reassured that the charging infrastructure is growing.
You don’t get a lot of revenue from EVs and the same holds true for the much touted new mobility services. So you’re clearly not doing it for the revenue?Revenue is probably the wrong measure. (BMW’s car-sharing service) DriveNow makes a little bit of profit but in the grand scheme of things, it’s not a lot. On the other hand, 500,000 to 600,000 people use the service regularly and we know a lot about them. We know who they are, how many kilometers they drive, where they go, how much they spend. We have quite a complete picture. We’re not sure if they’ll ever buy a car, but we do see fractional use of mobility becoming the norm in many places. The question is what’s the business model and what will you do with the knowledge you have. When we look at new mobility, we are looking at the number of people using it, rather than at the revenue that comes from it.
How does this affect your position as the biggest seller of premium vehicles globally?In the classic new-car business, we have 25 pc of a global premium market of about 8 million cars a year. Our customers are people who can afford to buy a premium vehicle. We operate in quite a tight part of the market. At the same time, virtually everybody can afford to drive a premium car when they use a car-sharing service. You can have a volume car, but if you spend another couple of euros you can have a BMW. The market for premium cars in this new world expands tremendously. Moreover, with DriveNow, we’re attracting a new kind of customer, not our traditional ones.
Since 2014, BMW has had a senior executive, Dieter May, in charge of digital services and business models. May comes from a different world, having previously worked for mobile phone company Nokia and chipmaker Infineon. How does he fit into a carmaker such as BMW?Dieter May came from the outside with a whole host of ideas, different methodologies and a much faster speed of doing things. In the traditional car industry we are really good at limiting risk and mistakes and all our processes are designed for that. In the apps industry, when you make a mistake you roll out an update tomorrow. Everybody’s happy because they are receiving an update, but what they’re actually getting is the correction to a mistake. Dieter May is charged with bringing that kind of different thinking into the car world and we’ve been very clear with him and his team that we want a rapid turnaround of new ideas. It’s not easy and it is often quite a tense relationship, but that is actually a good thing.
Interview by Arjen Bongard