For successfully keeping BMW in the black and on top in premium sales while simultaneously developing greener technology, Norbert Reithofer is Automotive News Europe's 2010 Group CEO Eurostar.
As the global economic crisis hit hard in late 2008, Reithofer moved aggressively to cut production and costs to keep the group profitable. In a particularly wrenching move, he pulled BMW out of Formula One racing last year and redirected the team budget to the automaker's green Efficient Dynamics program, which aims to slash fleetwide CO2 emissions by another 25 percent by 2020.
But the 54-year-old Reithofer hasn't been focused on cost-cutting exclusively. BMW is investing heavily in a new front-wheel-drive architecture; in new, smaller modular engines; and on electric vehicles. Reithofer also has given the go-ahead to build a second plant in China.
Reithofer, who joined BMW in 1987, was named director of the body-in-white production division in 1991. In 1994, he was dispatched to South Africa as technical director and, in 1997, to the United States as head of the automaker's new plant in Spartanburg, South Carolina.
He was appointed BMW CEO on Sept. 1, 2006.
Reithofer's cost-cutting actions at the end of 2008 have paid off on the bottom line. BMW scraped out a net profit of 210 million euros for 2009, off 36 percent from 2008, while Daimler posted a net loss of 2.64 billion euros.
Sales, profit rising
In this year's first quarter, BMW swung to a profit of 324 million euros from a loss a year earlier as unit sales surged nearly 14 percent to 315,614 units. In July, the company raised 2010 sales and earnings forecast on growing demand. BMW predicts sales this year to rise about 10 percent to more than 1.4 million cars and SUVs, while the operating margin in the automotive unit will be more than 5 percent.
Many analysts agree. The securities firm and investment bank Goldman Sachs predicts that BMW will post a full-year profit of 1.76 billion euros.
With his lower cost structure in place and the move into greener technologies and smaller segments well underway, Reithofer is dismissive of Audi's stated goal of dethroning BMW by hitting sales of 1.5 million units by 2015.
“We expect group sales to already hit 1.6 million units by 2012, and 2 million units by 2020,” he said. The group's three brands are BMW, Mini and Rolls-Royce.
Reithofer is especially proud that the company was named – for the fifth consecutive year -- the world's most sustainable automaker in the Dow Jones Sustainability Index. The index measures a company's financial performance and shareholder return against its impact on the environment.
Companies able to generate high profits with low impact on the environment score highest on the index.
Using a combination of fuel-saving technologies, such as stop-start, regenerative braking and active aerodynamics, along with future hybrid and electric models, Reithofer aims to cut BMW's fleet CO2 emissions worldwide by at least another 25 percent by 2020.
He also is investing heavily in a new fuel-efficient front-wheel-drive architecture which, excluding Mini, will be BMW's first. Reithofer said the fwd architecture, which will debut on a new entry-level BMW priced below the existing 1series, will underpin 700,000 to 1 million cars a year starting in 2014 or 2015.
BMW also is developing a new family of modular gasoline and diesel engines – including the company's first three-cylinder unit – that will power up to 1.5 million of the automaker's vehicles a year.
“(That's) a scale we never had at BMW before,” Reithofer said. He added that if BMW could find other automakers interested in this vehicle architecture as a whole, or just to some sub-systems, as well as to some of its new modular engines, this scale would grow even more.
Despite industry speculation that BMW has been looking for development partners, Reithofer denies that the company plans to cooperate with other automakers on platforms or electric-car development. But he is pressing ahead with plans to sell BMW engines to other companies.
“We will have to ask the question: What can we do on our own to create economies of scale?,” Reithofer said in an Automotive News Europe interview earlier this year. “Once we have built our own modular platforms, we can approach others and ask them to participate.”
This is the third Eurostar third award for Reithofer, who won the manufacturing executive category in 2003 and 2005.