BMW more than doubled global sales of full-electric cars during the first half. A big part of that success was topping Mercedes-Benz and Audi in EV sales in China, despite “fiercely competitive” market conditions, sales boss Pieter Nota said. He believes BMW’s EV lineup will only get stronger with the arrival of a half dozen models underpinned by the Neue Klasse platform. He discussed this and more with Automobilwoche Reporter Lennart Wermke.
Many automakers fear there will be a slump in Germany’s new-car market starting in the fourth quarter. Is BMW concerned?
I can't confirm that for us. We are in a much better position with the BMW brand in terms of new orders than the market as a whole.
What makes BMW different from its competitors?
While the overall economic situation is difficult, I think we are benefiting from the full strength of our portfolio. We have had seen a positive reaction from the market to our full-electric models, while our plug-in hybrids and combustion engine vehicles have also seen strong incoming orders.
Does it help during difficult times to be a premium manufacturer because your customer base has more purchasing power?
Only if you offer the customers something in return. Simply claiming that you are premium is not enough. Premium means you need to provide substance to the customer. But, of course, it helps to be active in a part of the market where you might feel a little less reluctance to buy.
In this episode of the Ally All Ears Podcast, Aaron Lee, Senior Director at Ally Dealership Insurance, discusses the growing threat of cyberattacks on dealerships and the importance of staying vigilant. He shares essential tips for safeguarding against these risks and highlights the need for specialized cyber insurance coverage to protect your business.
How will the decreasing subsidies for electric cars in Germany change demand?
This certainly is not helping sales, but on a higher level, when it comes to promoting electric mobility, we need continuity and not an on-and-off strategy. We would rather see a consistent expansion of the charging infrastructure, which would an enormous help to addressing the ongoing issue of range anxiety.
What is your outlook for models that will be underpinned by the Neue Klasse platform?
We have really achieved a great success with the Neue Klasse. In terms of technology and design, we are jumping further than ever before. At the IAA, we only showed one vehicle from this new generation platform. There will be six vehicles. Before you ask, I can't give you a price for these vehicles, because they doesn’t exist yet. This will depend on the market conditions at the respective launch times of the models.
The coming Neue Klasse-based vehicles will be full electric. So, why are you not ready to say goodbye to the combustion engine?
I would like to give you two figures to consider: Worldwide, we more than doubled sales of full-electric vehicles in the first half of 2023 [the volume was 133,927, a 122 percent increase on the first half of 2022]. And in China, despite a fiercely competitive market, we sold more than twice as many electric cars in the first half as our competitors from Stuttgart [Mercedes-Benz] and Ingolstadt [Audi] combined. This shows that, on the one hand, we can say that there are several types of drive systems that can contribute to the overarching goal of decarbonization, and at the same time we can sell electric cars very successfully.
Imports of BMW models to China have generally declined compared with 2022, but exports from China have increased. Why is that?
We localized production of the X5 in China instead of shipping it from Spartanburg [BMW’s U.S. plant in South Carolina]. The X5 is very successful in China, especially the long-wheelbase variant. By the end of July, we had increased BMW brand sales in China by 4.8 percent in an overall market that grew by only 2 percent. This shows that we have gained market share.
Could even more China-built BMWs be exported to other markets in the future?
In principle, that is conceivable. With the current iX3, we are already shipping a vehicle from China to the European market. In addition, there is the new generation of the electric Mini.
In addition to China, India is forecast to grow. Will BMW take advantage?
I wouldn't limit this to India. All of Asia still has enormous potential. In India, the premium segment is growing relatively slowly. We, however, are seeing visible market success with our electric cars in Thailand and Malaysia. Here, too, a new market is emerging for the premium segment. Vietnam, where we have set up our own production, is also emerging. From a global perspective, however, the most exciting market environment for us is the U.S., where we are more successful than our competitors in the premium segment, especially with our large X models.
BMW is moving to the direct-sales agency model in Germany to sell its cars, starting with Mini in 2024 while BMW will switch in 2026. As recently as 2021, however, you said BMW was doing well with the traditional sales model. What has changed since then?
Maybe I just didn't want to tell you about the introduction of the agency model in 2021 (laughs). Seriously, I think that especially in the area of digitalization, we will have completely different options for Mini in 2024 and for BMW in 2026 than we did two years ago. We now have the confidence that we can systemically set up and prepare everything in such a way that we will be successful. We are on schedule. The contracts are available and have even been signed by the first dealer groups. At the beginning of 2024, the first Mini stores will go live with the agency model as planned. In China, by the way, we have been on the road with Mini in an agency model since March 1.
What is the feedback from there?
Positive. We deliberately chose 2023 for this because we will be launching the new generation of Mini there in 2024. From an IT point of view, everything is already working there in cooperation with the dealers.
The Neue Klasse will be launched in 2025, while BMW's agency model will not be launched until 2026. Could that create some problems?
At some point, you always need a fixed switching date. You can't pin that down to one generation of vehicles. And keep in mind that the Neue Klasse will be launched in 2025, but certainly will not achieve a high volume of our sales until 2026. In this respect, it fits together well and there will be no disruption in the distribution of the Neue Klasse.
