BMW to invest 6 per cent of revenue in R&D; plans to streamline manufacturing to pay for research

The new vision for BMW seems to be “Less is more.” The German carmaker plans to offer fewer choices to customers — in a move to help pay for the high cost of research and development. The initiative was announced by Nicolas Peter, CFO of BMW.

With the heavy investment into future technologies — notably, electric and autonomous —BMW believes the move will fund a major push in these areas. Although the customer may have fewer choices, the long term benefit should be technological advances in future models.

 

BMW’s Spartanburg assembly line. There will be fewer variants offered in future in terms of drivetrains and options, which should increase line efficiencies.

 

BMW spent 5.5 per cent of its rev enue (about US$5.9 billion) on R&D. Nicolas Peter has indicated, “The next three years will be between 5.5 per cent and 6 per cent.”
One of the other issues confronting not just BMW, but all car-makers, is the lower profit margins returned from sales of electric or hybrid vehicles. Reducing complexity of manufacturing, with fewer options and driveline choices, will help offset both the research costs and the lower margins from electric and hybrid options.
One of BMW’s advanced electric/hybrid models, the sexy, but high tech, i8.
Some of the current line that might face cuts:
  • BMW 2 series coupe destined for U.S. no longer available with manual shift
  • Cut down on the diesel variants from the current four choices
  • Reduce parts choices: Nicolas Peter gave the example of “We have over 100 steering wheels on offer. Do we need that many variants?”
With increased competition, some market shrinkage in the U.S. market — and only slight growth in Europe and England — these measures should help BMW keep to its guidance of EBITA 8 to 10 per cent. Double digit growth in China will also prop up the bottom line.

SaveSave

SaveSave

Did you miss this?

Other Popular Stories

  • Scientists create liquid fuel from solar energy
  • Self-Healing Grids Developed
  • Fewer building permits in February for non-residential construction
  • Canadian Solar could earn $2.3 billion through acquisition of Recurrent Energy
  • Canadian oil output to double by 2030 say oil producers
  • GE increasing its investment in fracking technology
  • Greater transparency, accountability called for in new homes warranty plan for Ontario
  • Vanadium dioxide (VO2) metal conducts electricity — with ten times less heat
  • Green Hydrogen is becoming more mainstream
  • Safer tank cars coming as railways ship more oil than ever
  • Aerospace is to Quebec what auto industry is to Ontario, and must be supported: Couillard
  • West Coast group looking at LNG as marine fuel
  • For some car makers March was best ever
  • Engineers Working to Develop Artificial Gravity for Near-Earth Orbit Space Station
  • Touchless computer control from Waterloo tech company an early success
  • Elon Musk's green vision extends to the Tesla Semi, capable of hauling 80,000 pounds for up to 400 miles on a single 30 minute charge
  • Siemens awarded largest ever contract for onshore wind turbines
  • Researchers claim micro-fluidics breakthrough with liquid metal pump
  • SpaceX Mars Exploration By 2019? Maybe not.
  • Ontario's FIT program ruled illegal by World Trade Organization
Scroll to Top