MUNICH - BMW AG has changed its product strategy substantially since acquiring Rover in the UK.
Originally, BMW said it would use Rover for small cars and off-road vehicles. BMW would remain true to its 3- 5- and 7-series core.
Now, says Chairman Bernd Pischetsrieder, BMW will:
Have a BMW sport-utility built in America
Probably sell the Rover Mini at BMW dealerships
Build a super luxury car if it does not buy Rolls-Royce
Build niche sports coupes and convertibles to compete for customers with the Mercedes-Benz CLK and CLK convertible.
In an interview, Pischetsrieder said that BMW is creating its own segments. In fact, like Volkswagen and Mercedes-Benz, BMW is pushing its brand in all directions.
Rover seems to have a new place in the BMW group strategy as the brand for emerging markets. It will continue to be the brand for off-road sport-utilities, said Pischetsrieder.
BMWs won't replace wood with plastic or leather with vinyl, he said, in an apparent dig at Mercedes.
In a direct swipe, he said BMW would price its sport-utility higher than the Mercedes-Benz M-class. The M-class is priced against well-appointed Ford Explorers and Jeep Grand Cherokees.
'We will attract customers who are bored by truck-like driving SUVs or normal passenger cars that are too small,' Pischetsrieder said.
As for Rover, said Pischetsrieder, 'I know where Rover has to go and we're slightly ahead of time. We've got everything under control but the (UK) pound.'
The strong UK pound is hurting Rover's finances. It has the effect of increasing costs 25 percent, said Pischetsrieder. He said Rover may not meet BMW's target of turning a profit in 2000 because of it.
Rover's exports have risen from 10 percent to 55 percent of production since BMW took over in 1993.
'It's the right direction because the pound isn't going to always be where it is,' said Pischetsrieder.
To cut costs, Rover and BMW will share electronics and engines.
The eight-cylinder common rail diesel engine shown in Frankfurt last fall 'could fit into a Range Rover quite nicely,' he said.
The Range Rover has to become more comfort-oriented with a passenger-car ride, said Pischetsrieder. Discovery will remain a utility vehicle and Defender will continue as the 'rugged off-roader.'
Rover will play a key role in emerging markets. 'From today's point-of-view,' he said, new markets would preferably be opened by Rover rather than BMW.