Business

BMW calls for endless customization times as electricity costs drop

BMW plans to completely narrow buyers’ choices to everything from its color to its wheel rims, as the switch to electric vehicles forces the German group to cut costs and complexity.

The automaker has long prided itself on offering a variety of design customizations, engine variants and car features, including the Mini brand, to attract customers.

However, that promise is becoming increasingly harsh as the company produces more electric cars but has not yet reached the numbers to achieve economies of scale with internal combustion engine models.

The Munich-based group, which is targeting profit margins of 8 to 10 percent even as it sells more electric models, needs factories that make both internal combustion and battery-powered cars right.” highly effective” to achieve that goal. , Chief Financial Officer Nicolas Peter said.

“We will specifically reduce the number of combinations available, because certain combinations make no sense at all and are never selected,” Peter said in Frankfurt on Tuesday.

BMW’s new strategy contrasts with that of mass-market manufacturers, which often offer a dizzying array of options for generating more revenue and increasing razor-thin margins.

At the other end, Ferrari and Lamborghini also make huge profits by convincing customers to order aesthetic changes to the seats or wheels.

For BMW, “there is potential from providing 10 [rims], which we could have done sooner, up to five,” said Peter, pointing to BMW’s new electric iX model, “without losing a single one. [sale]”.

A small number of customers who choose a particularly relevant option, Peter said, “would have bought something else,” if that option wasn’t available.

In contrast, Sweden’s Volvo Cars offers customers only a single four-cylinder engine option and has simplified the range to cut costs.

The number of modifications BMW puts out will land somewhere between the extremes, says Peter, noting that there’s “enough room to move to the middle, to be more efficient and save money”, in while still offering enough customization to justify the high price tag.

BMW’s move comes as the growing importance of in-car software means that digital customizations will play a bigger role in differentiating premium cars from one another, Peter said. to add.

While BMW’s longtime competitor Mercedes-Benz has also begun to reduce the complexity of its lineup, such as phasing out models with manual transmissions, the company has yet to announce changes. policy details.

Once a pioneer electric car company, with the leading i3, BMW has lagging behind its rivals in the race to launch battery-powered models, and has expressed skepticism about the expected speed of the transition from the internal combustion engine.

However, the company expects to sell more than 100,000 all-electric vehicles this year, doubling that number next year, Peter said, despite the persistent semiconductor supply shortage. persistent.

Source link

news7h

News7h: Update the world's latest breaking news online of the day, breaking news, politics, society today, international mainstream news .Updated news 24/7: Entertainment, Sports...at the World everyday world. Hot news, images, video clips that are updated quickly and reliably

Related Articles

Back to top button