Dialogue Zipze: what is BMW's advantage in the next decade?

In the year of 2020 storm, the development of the new four modernizations of the automobile is changing the traditional industrial structure. In the past, more intelligent network connection process occurred in the IT industry, which began to sweep the automobile industry system. Today, the epidemic has accelerated this change, and traditional car companies have made efforts in high value-added areas driven by new technologies, such as electric drive, self-driving, digitization and so on.

Can the research and reshaping of business models and the assessment of cutting-edge technology routes accurately step into the river of change? These questions test not only the new chairman and core executive team of BMW, but also the common questions faced by all industry leaders. On the eve of the 2020 Beijing Auto Show, Auto House had an in-depth communication with (Oliver Zipse), chairman of BMW Group, to discuss BMW's change strategy. It is worth noting that in addition to the system capacity accumulated over the past century, BMW has also planted a "spark" and may launch a new offensive on the digital track.

Zippze's entire career is inextricably linked to BMW. He joined the BMW Group in 1991 as an R & D and production trainee and has since been promoted to a number of management positions, including plant director at Oxford, senior vice president of corporate planning and product strategy, group director, etc., and has served for this luxury car brand for more than 29 years. Mr Ziptze is seen by his mentor and predecessor, Mr Rathoff, who is now chairman of BMW's supervisory board, as the right person to "provide BMW with a new driving force to shape the future".

So how does Chipze shape the new momentum of BMW's future? In the year when he took over the handsome seal, the global auto market was in a period of deep adjustment, which caught up with the direct impact of the COVID-19 epidemic and faced many challenges. But BMW, led by Zipze, remains resilient enough. In the first half of the year, BMW still made positive pre-tax income, kept the company running, and all vehicle projects entered the market as planned.

"Sustainability" and "flexibility" are not only the mantra of Chipze, but also the underlying strategy of BMW to deal with the transformation of the industry. The future is unpredictable, and Chipze's strategy is to make BMW a responsive and responsive company, constantly increasing the level of digitization to respond to the epidemic and possible changes in the market.

The investment in the turbulent period can see the concentration of the enterprise. Chipze reiterated BMW's focus on achieving profitable growth and laying out future initiatives. It is planned to invest more than 30 billion EUR in research and development by 2025, with electrification and digitization as the focus. The pace of new products will not be slowed down by the epidemic. 25 new energy vehicles will be launched by the end of 2023; the target of selling 500000 new energy vehicles from 2020 to 2021 and 7 million new energy vehicles by 2030 will remain unchanged. Among them, the position and resources invested by the Chinese market will become heavier and heavier.

To achieve sustainable development and improve resource efficiency is the core of the strategic direction of BMW Group. According to Ziptzer, BMW has set clear targets for reducing carbon dioxide emissions by 2030, covering for the first time the entire life cycle from the supply chain to production and finally to the end of the product's useful life. the aim is to reduce carbon dioxide emissions per vehicle by at least 1x3.

The strength of competition in the next decade

In the competition with old rivals Mercedes-Benz and Audi, BMW has an obvious upward trend in recent years. Over the past year, BMW Group has won the top spot in terms of sales in both the global and Chinese luxury car markets. From January to August this year, BMW sold 478600 vehicles in China, up 3.4 per cent from a year earlier.

In this regard, Chipze said that the recent successful performance of the market can not be achieved overnight, but from the long-term decision-making and layout of the past.

Since 2018, BMW has stepped up its product offensive, and the strategy of "in China, for China and the world" has also achieved remarkable results. Following "the year of X" and "the year of large luxury cars", the theme of this year's product is "the year of New Energy". The masterpiece iX3 debuted in the Chinese market and launched its pre-sale on September 14.

Compared with Mercedes-Benz, Audi and new competitor Tesla, BMW's first all-electric model was launched nearly a year later, raising industry and consumer expectations. But for this time node, Chipze believes that iX3 (parameter | inquiry) is "timely". First, considering the acceptance of the market, China and the major markets are developing rapidly in the field of electric power. Second, BMW has to choose the entry point of technology, such as autopilot, software upgrades and other cutting-edge technologies. During the period from 2020 to 2023, the market is very active, and it is also a good time to carry relevant technologies on models.

Chipze's confidence in iX3 comes not only from the fact that the X3 is one of BMW's best-selling models, its own popularity and pure electric version, but also from the market performance of BMW's new energy models in the past. For example, when MINI Cooper SE was first launched, it also faced questions from the outside world, but in actual sales, supply fell short of demand. Chipze attributes this to users' trust in the brand, and as a brand, BMW has to deliver on its promises in quality, safety, service and other aspects. By the end of 2019, BMW had sold a total of 500000 new energy vehicles.

It should be pointed out that the iX3 is also BMW's first model based on compatibility platform, opening the prelude to fuel, plug-in hybrid and pure electric multi-wire. Horizontally, Volkswagen, Toyota, GM, Mercedes-Benz, Ford, Hyundai and other multinational car companies all take the route of building their own pure electric vehicle platform, while BMW has chosen a different path. This strategy reflects Ziptzer's thinking about BMW's goals and size:

"if BMW is to succeed in the market in the next decade, it must be able to do a variety of drivers. BMW's base is not 500000, but 2.5 million, and we have a high growth target. On the one hand, electric cars can grow rapidly-10%, 20%, 30% or even 40%, but our goal is to lead the global luxury car market, so it is not enough to build electric cars-we also need to do a good job in plug-in hybrids, gasoline engines and diesel engine models in some markets. This is determined by the size of the BMW. "

To sum up, what BMW needs to do is to gain insight into the diversity of customers and provide "the right to choose", which is reflected not only in the technical route, but also in the product lineup. After the iX3, BMW will also offer i4, iNEXT, and all-electric versions of the 7-Series, 5-Series, 3-Series and X1 to cover the needs of different groups of people.

While capital and the media public seem more willing to track the movements of new forces such as Tesla, hoping for an example of "Apple subverting Nokia" in the auto industry, the car market has never been a winner-take-all short-term war.

Chipze also put forward several cold thoughts about the contrast between the new power of car-building and traditional car companies. In addition to the guarantee of quality and after-sales, another strength that can not be ignored by traditional car companies is the iterative and systematic ability of their products. "it's relatively easy to design and build a new car from scratch. The difficulty is how to dock and integrate with the existing systems of the previous generation models when the follow-up models are launched. Relatively mature car companies have this ability, but the new forces generally have not yet entered this stage, how to integrate future models into the existing system foundation, this is a difficult point. In this regard, BMW has a very outstanding advantage for at least the next decade. "

The road to automation has never stopped.

Under the trend of "software-defined cars", BMW is not to be outdone. In terms of OTA remote software upgrades, 14 million BMW vehicles have been connected to the Internet, and all new models after 2018 will have OTA capabilities. In April this year, BMW launched OTA upgrades to more than 500000 vehicles around the world. Apart from Tesla, no other European car company has ever had such a large-scale OTA upgrade.

In addition, BMW is one of the first traditional car companies to build L2-level auxiliary driving systems in mass-produced models. The X5 and 7 series launched in early 2019 are equipped with L2-level ADAS systems.

Take the iX3, for example, which is BMW's first all-electric product with the company's intelligent driving system Pro. The system provides auxiliary driving, traffic congestion assistance, lane change assistance, emergency parking assistance and speed limit identification assistance and other functions. On the high-end version, the iX3 can also be equipped with omni-directional automatic parking assistance system functions, including automatic parking placement, BMW driving recorder, tracking reversing assistance, remote 3D parking images and so on.

The iNEXT, which will be launched next year, will carry more combinations of cutting-edge technologies, which will also be available on models such as the 7-Series. There are several aspects of these technology combinations, including strong computing power inside and outside the car, as well as sensor systems that integrate cameras, millimeter wave radar and lidar. Unlike the radicalism of some startups, BMW pays more attention to brand commitment and safety is always the first priority. Therefore, it is more cautious in the application of intelligent network connection and other technologies. Chipze mentioned that it is impossible to realize autopilot without any one of camera, millimeter wave radar and lidar, not even semi-autopilot and driving assistance. On the other hand, the BMW with "complete hardware" can drive safely regardless of season, weather and daylight. He stressed that when BMW launches new technology, it will never risk its customers.

BMW also attaches importance to continuous research and development, and the application of data-driven development is not just around the development of new cars until the end of the launch, but the continuous upgrading and iteration of vehicles on the road. There are also a variety of capabilities such as artificial intelligence and visual recognition in the technology portfolio, which will have a comprehensive experience on iNEXT models in the future.

Mr Chipze said that to be a leader in the global market, a very high level of technology must be achieved in all areas. Software is only one of the key points, and comprehensive safety measures are needed to integrate all kinds of technologies into the car perfectly. And BMW has these technical capabilities now, and Chipze is full of confidence.

The digital R & D system will be integrated soon.

BMW's layout is about to make a very crucial move, although it has not yet appeared, but it will play a huge role in the future. According to Chipze, BMW will set up a new department, "Digital car (Digital Car)", at its German headquarters on October 1, to report to Wei Bofan, a BMW group director in charge of research and development. The department will integrate the work of software, electronic circuits, autopilot and driving assistance, as well as the interconnection of the company's research and development and technology applications. In other words, all car digitization and related digital services will be the responsibility of the department.

Earlier, BMW established Lingyue Digital Information Company in China, which is also the first multinational car company to set up digital information technology alone in China, showing a keen sense of the digital trend. This platform is mainly aimed at marketing and user experience, the goal is to get through the experience of users online and offline, to provide consumers with a unique user ID, to record every link and needs of the car, and to achieve end-to-end docking of BMW's various business lines.

The new department to be set up in German headquarters is even more important, starting directly from the R & D system, digital development and vehicle development in a two-pronged approach, systematically combining digital, customer, R & D, supply and other related capabilities. Once the whole is opened, it will drive the upgrading and fission of BMW's R & D, production, channel to terminal.

Chipze said bluntly that digitization is crucial to the future of any mainframe factory, and the epidemic has accelerated BMW's digital layout. In the future, the epidemic will eventually go away, and the synergy and high efficiency brought about by digitization will finally settle down.

Write at the end:

The automobile industry is one of the most complex industries and one of the most difficult to interpret. The effect of the decisions made by car companies now may not be apparent until five years later.

Ziptzer has mentioned eight serious challenges experienced by BMW over the past century to demonstrate the company's resilience and ability to overcome major difficulties. "for example, during the oil crisis in the early 1970s, the company invested in building a Dingerfen plant; during the global financial crisis in 2008, the company still made a profit and planned the first all-electric vehicle with a full value chain to achieve environmental protection." He stressed that BMW can turn external challenges into a driving force for transformation and "find a new direction from the crisis".

Judging from this dialogue, Chipze still sets high growth targets for the future, which shows that BMW will not stay in the current field and battlefield, whether horizontally or vertically. At the same time, he also formulated a pragmatic and effective development strategy for BMW, taking into account both short-term and long-term development. In the technology reserve, electrification, autopilot, digitization and other capabilities continue to advance, more important than the development of technology is to keep a safe and reliable brand commitment; product competition strategy to give users a variety of choices, believe in the power of choice.