Few factories are more closely connected to a company's identity than BMW’s Munich plant. Established in 1922, the factory has built iconic models such as the 3 Series -- and perhaps even more notably for a company with "Motor" as part of its name, millions of engines.
Until now, those engines were BMW’s fabled "big sixes," as well as four-, eight- and even 12-cylinder models. But at the end of 2020, BMW took an abrupt U-turn at the Munich site, moving all engine production to existing factories in Austria and England and dedicating it instead to electric cars.
"Restructuring our engine production network is a strategic move geared toward the future," Milan Nedeljkovic, the BMW management board member responsible for production, said at the time.
European automakers are facing similar decisions, with combustion engines expected to be effectively banned by 2035. Electrification is the main force that is buffeting Europe’s once-mighty network of engine factories, which cranked out more than 20 million gasoline and diesel units as recently as 2019.
"Automakers are consolidating their engine plant portfolios because it doesn't make sense to maintain dozens of production lines if the volumes aren't there anymore," said Romain Gillet, the lead EMEA powertrain analyst at S&P Global Mobility.
Industry consolidation -- notably the creation of Stellantis -- has meant that factories that once exclusively supplied brands such as Fiat or Opel have either closed or are in peril. And with the need to guard margins to finance the move to electrification, engine ranges within brands and even models have been scaled back.
Finally, an overall cloudy outlook for the European market in the wake of COVID lockdowns, the conflict in Ukraine and looming hikes in inflation could mean demand for cars (and engines) will remain millions of units below pre-pandemic levels.