Considering last year’s strong sales numbers, you might expect to see BMW Chairman Helmut Panke thumbing his nose at skeptics. Global sales burst through what Panke called the “magic sound barrier” of one million last year — despite the loud criticism of the automaker’s new design theme and its complicated iDrive system.
Still the customers keep buying the cars. What does that tell us?” asked Panke, during a recent interview. “We should continue doing what we’re doing.”
Well, maybe not entirely. An all-new version of the Bavarian marque’s 3-Series is just starting to roll into dealer showrooms around the world. While there’s a clear family resemblance to the edgy 7-Series, the vehicle that launched BMW’s new look, Dutch designer Adrian van Hooydonk took an admittedly more conservative approach with the fifth-generation 3er. Few were surprised.
“Taking a low-risk approach…was a good move for BMW,” said George Peterson, chief analyst with the consultancy, AutoPacific Inc. Since the 3-Series accounts for more than 40 percent of the automaker’s global sales, it is a make-it-or-break-it car for BMW. And not just in the short term. “This is the product that attracts young people in to have their first ‘Bimmer’ experience,” added Peterson. Scaring them away with an over-the-top new 3-Series could have hurt profits now, as well as long-term sales of the more expensive 5-, 6-, and 7-Series lines.
BMW even played it safe on the technology side. The new car has plenty of electronics onboard, including active steering, dynamic stability control, and laser-guided active cruise control. But buyers can opt out on iDrive, with its single, hockey puck-sized controller, if they’re willing to forego the DVD navigation system.
iDrive, they question
There’s no question iDrive is a controversial subject. Even the mildest criticism will bring a wince to a BMW executive’s face. But Panke insists the company won’t walk away from technology he sees as crucial to tomorrow’s car. There are simply too many electronic systems onboard, he points out, and without iDrive — BMW’s equivalent of a computer’s mouse — the instrument panel would be covered with what the CEO likens to electronic butterflies.
2004 BMW 3-Series
Yet the decision to offer 3-Series buyers an option reveals BMW’s recognition that iDrive hasn’t quite connected with existing owners. In new research, AutoPacific finds that satisfaction with the 7-Series plunges to “dead last” on the ease-of-use scale, according to Peterson, and iDrive is a major reason why.
Since the current 7-Series was introduced nearly four years ago, each new model has incorporated changes designed to make iDrive more user-friendly. On the 330i, for example, there are quick shortcuts to switch from one menu to another. “We want to do it better,” insisted Dr. Ulrich Heiden, who oversaw electronics on the new 3-Series. “You should never see or feel the electronics. It should be intuitive.”
While recent controversies might have been a distraction, it’s clear that BMW’s senior management has not lost its collective focus. Creativity and technology like iDrive will remain essential hallmarks of the Bavarian automaker’s strategy, stressed Panke.
Much of BMW’s growth has come, in recent years, from its entry into all-new and emerging product segments. “We will not stop our product offensive,” the tall and lean CEO stressed, promising to continue to “bring new models out there.” The biggest challenge, Panke added, “is to not run out of ideas.”
Fragmenting the market
BMW was one of the first automakers to grasp the increasing fragmentation of the automotive market. Even though it has been more cautious than rivals about introducing radically different product lines, BMW has carefully targeted niche segments. The current 3-Series, for example, comes in more than a dozen different flavors, including base diesel sedans, sporty coupes, utilitarian wagons, and the high-performance M3.
And though BMW insists it is not in the SUV market, it recently added a second “sport-activity vehicle,” the X3. The original SAV, the X5, arrived just in time to tap the explosive growth of the luxury ute segment. However Panke is convinced that the rapid growth “of the classic SUV is over.” Buyers, especially in the
2004 BMW 3-Series
Early versions were designed to look like conventional sport-utes, but going forward, crossovers are likely to make their own, unique design statements, added Panke, pointing to the hard-to-categorize Infiniti FX45.
While the problems with iDrive might be resolved with some changes in programming, there are other issues BMW has to address, including recent quality snafus, which Panke declared a serious concern. “We need to have a quantum leap in the quality of all our vehicles,” with the goal of being at least in the top three brands, as measured by the Initial Quality Survey and other J.D. Power & Associates reports.
The German carmaker’s general good fortunes were not limited to the BMW brand last year. It continued to score well with its British MINI marque, which has continued to struggle to meet surging global demand. Panke said the company continues to seek ways to break production bottlenecks and boost output at MINI’s
For the moment, at least, BMW also has no plans to add a second assembly plant in the
Skeptics aside, BMW continues to draw in new buyers, and if the new 3-Series carries its weight, capacity is a question the automaker will have to revisit regularly.