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BMW development chief Diess says internal synergies key to premium strategy

Diess says the heart of BMW's strategy is introducing a new front-wheel-drive architecture as well as a new three- and four-cylinder modular engine family.
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BMW Group aims to make permanent its nine-year reign as the world's No. 1 premium automaker. To achieve this, the company plans to strengthen internal synergies between its BMW, Mini and Rolls-Royce brands as well as consolidate platforms and produce engines that can be shared by more models. BMW calls its plan Strategy Number One. Its goal is to ensure profitability even in volatile times. The plan has already helped BMW Group cut billions in costs while achieving record sales, including a new all-time high last year of 1.94 million units. That was up 6 percent on 2012, bringing it close to its 2016 target of 2 million units. BMW development director Herbert Diess discussed the group's platform and engine strategy with Automotive News Europe Editor Luca Ciferri.

How has your Strategy Number One plan helped BMW?

We have already introduced downsized gasoline and diesel engines and we've launched our first battery-powered car, the i3. But this year will be crucial. We are going to the heart of our strategy, introducing a new front-wheel-drive architecture as well as a new three- and four-cylinder modular engine family.

Will the fwd platform account for about a quarter of BMW Group's planned 2 million sales by 2016?

It will depend on various market developments. So far we have decided that the new front-wheel-drive platform will be used for the third-generation Mini range and for the 2-series Active Tourer, which will be our first front-wheel-drive [BMW brand] car. The plan envisages about 30 rear-wheel-drive models and 15 front-wheel drive, including Mini, so we will still be very much a rear-wheel-drive company.

Will the Active Tourer be BMW's only fwd car?

That is the current plan. In Europe we are selling fewer and fewer 5 series and 7 series, so we do need smaller cars to respond to the downsizing trend in the premium segment. We have also seen a trend toward more functional cars and it would have been very difficult to derive a model such as the Active Tourer from our rear-wheel-drive platforms. That being said, we are still discussing if and when to launch other front-wheel-drive BMWs. This new platform does provide us with considerable flexibility, as it can underpin models up to 4.6-meters long.

Will you simplify your rwd platform strategy?

Absolutely. Reducing the amount of variety and complexity is a key pillar of Strategy Number One. In the past we basically had two rear-wheel-drive platforms. One was centered on the 1 and 3 series and their respective X models and the other on the 5, 6 and 7 series and larger X models. In the future, we will converge all our rear-wheel drive and X models on a single, highly flexible architecture.

Will this new rwd platform also underpin future Rolls-Royce models?

Rolls-Royce will continue to share some elements, such as its electric system and electronic components. Its powertrains are heavily modified BMW units. But on the body side the two brands will remain worlds apart – steel unibody construction for BMWs and aluminum spaceframe for Rolls.

What is the potential range of your new modular engine family?

A 500cc combustion chamber for both gasoline and diesel, with both three- and four-cylinder layouts, giving total capacities of 1.5 and 2.0 liters. One crucial element is that these new engines are designed to mount transversally in Mini and BMW front-drive models, as well as longitudinally in other BMWs. This is a level of flexibility we did not have in the past.

Meet the r&d boss
Name: Herbert Diess
Title: Board Member for Development, BMW Group
Age: 55
Main Challenge: Achieving better synergies between BMW, Mini and Rolls-Royce.

Will your renowned six-cylinder 3.0-liter engine also be derived from this new modular family?

It will -- because three-, four- and six-cylinder engines are all produced on the same line.

Is compressed natural gas (CNG) part of BMW's future?

We have some predevelopment running, just to keep up with the technology. We could probably be on the market within two years, but we are not planning to do so because we don't see a breakthrough in this technology on the horizon.

But Audi is trying to demonstrate that CNG cars could be a cost-effective premium solution.

To really increase public awareness of CNG you need to have a big manufacturer, such as Volkswagen, pushing it. In the '80s we had two CNG cars. They both worked well but we couldn't sell them. Our view is that to drastically reduce tailpipe emissions an electric car fueled by renewable energy is still the best solution.

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You can reach Luca Ciferri at lciferri@crain.com.

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