BMW reveals growth and sustainable mobility plans in Asean region

At a roundtable discussion with selected motoring editors and columnists last Wednesday, top BMW Group executives led by BMW senior vice president for special projects-Asia Kay Segler and BMW Asia president Sergio Solero revealed the German-based premium carmaker’s plans to expand growth and sustainable mobility in the Asean region.  Their presentation was timely since Asean integration is just around the corner.

 

As if the media present weren’t impressed enough with the brand, Segler rolled out the BMW Group’s achievements in 2013: a 6.4-percent growth in overall global sales to 1,963,798 vehicles sold for a turnover worth $250 billion, broken down as follows: 1,655,138 BMW units sold for a 7.5-percent increase compared to 2012; 305,030 MINI vehicles sold for a 1.2-percent increase; 3,030 Rolls Royce automobiles sold representing a 1.5-percent increase; and 115,215 BMW motorcycles sold for an 8.3-percent jump in sales. According to The New York Times, BMW—having sold 1.65 million vehicles worldwide last year—remains the world’s  top-selling luxury auto manufacturer with Audi (1.57 million) second and Mercedes-Benz (1.47 million) third.

 

CHANGING. In 2014, Segler said, the BMW Group plans to release 16 new models and sell 2 million vehicles globally with targeted investments in ultra-energy-efficient technologies not only in their vehicle lineup, but in their production plants and innovative mobility services as well.  The BMW Group is changing, he said, as the world is changing because of climate change, depletion of natural resources, growing urbanization (around 70 million more people will be added to cities worldwide this year), changing levies on cars, changing carbon dioxide and emissions regulations, changing values in economics, culture and consumer expectations.

 

He noted that many young people in developed countries today choose not to own cars, but prefer to share or rent cars, using apps on their smartphones to easily access individual transportation.  The demand for new mobility solutions posts a daunting task for vehicle manufacturers as people everywhere become more aware of the need to reduce their personal carbon footprint and expect sustainable mobility together with  safety.

 

DIVERSE MIX. In the context of all these global challenges, what is the future of the car engine? Will the internal combustion engine become outdated technology just as steamboats

replaced sailboats and digital cameras replaced analog cameras?  Segler said that BMW’s product strategy involves evolution and revolution—to evolve the internal combustion engine’s efficiency with innovative technologies like  EfficientDynamics  (introduced in 2000 and now standard for all BMW models) and to revolutionize mobility by developing alternative drivetrains.  The BMW Group’s vehicle mix will be more diverse in the future, Segler said, with the internal combustion engine projected to continue as mainstream up to 2020-2030.

 

“Electric vehicles will achieve relevant market share in the long run,” Segler predicted. “By 2020, the market share of Plug-in Hybrid Electric Vehicles (PHEVs) is estimated to reach 5-15 percent.”  In 2010, BMW was able to reduce the carbon dioxide emissions of its vehicles by about 30 percent based on the year 1995 and is striving for another 20 percent by 2020 to reach 50 percent total reduction of CO2 emissions.

 

PROJECT i. In 2007, the BMW Group launched Project i to develop sustainable and future-oriented mobility concepts through new projects in the areas of production, development and marketing. The BMW i electric vehicle range is an offshoot of Project I and in 2012, the first BMW i store opened in London, the world’s first BMW i showroom dedicated solely to electric and sustainable mobility. BMW’s initiatives and leadership in innovative and sustainable auto manufacturing have been recognized by Frost & Sullivan, the global growth consulting and market research firm, which awarded BMW the 2013 Global Company of the Year Award.

 

INNOVATIVE AND SUSTAINABLE

 

MOBILITY IN THE ASEAN REGION. The growing importance of the Asean region for the BMW Group was highlighted last year when sales surged by 15.9 percent to 25,300 vehicles, more than double the 6.4 percent growth posted worldwide, said  Solero.  Composed of 10 member countries, the Asean region has a total population of 600 million, mostly young and an expanding middle class.  GDP growth in the Southeast Asian region is expected to hit 5.4 percent from 2014 to 2018, on par with the GDP of Brazil and India. “Strong domestic fundamentals helped to spare Southeast Asia from slow growth in the global economy,” Solero observed.

 

INTEGRATION. The Asean integration scheduled for 2015 projects the region as an economic community that is expected to converge and become a single market to promote regional harmonization of standards, environment policies and tax structures, Solero said.   Asean integration is bound to attract more investments from companies all over the world, paving the way for a growing automotive market and a production hub for both car manufacturers and suppliers.

 

Solero emphasized that in the assembly of cars, the importance of the component industry is underestimated.  He pointed out that the BMW Group buys about 20 to 30 million dollars’ worth of high-tech components worldwide every year. Segler added that BMW is willing and has offered to contribute ideas and inputs to lift the car manufacturing industry in the Philippines.

 

INITIALLY HYBRID. Sustainable mobility for the Asean region will initially consist of hybrid vehicles since the viability of electric vehicles will take time in some markets. EVs require the proper infrastructure and government support in the form of tax incentives and duties that encourage the development of sustainable mobility. This is why the BMW i3 will be sold in only 30 countries all over the world including Singapore, South Korea, China and Japan.

 

At present, the Philippines does not have the infrastructure and tax setup to enable the entry of the BMW i3 although with 34 percent market share, the BMW brand has been the undisputed leader in the Philippine premium vehicle segment for 11 straight years in terms of vehicle technology, innovative services and volume sales. Segler, concurrently SVP for corporate and government affairs, said.  “For the BMW brand, the future of mobility lies not only in creating sustainable mobility solutions, but by sustaining growth in emerging markets such as the Philippines as well.”

 

POTENTIAL. BMW sustains growth in the Philippine luxury car market by distributing through the Asian Carmakers Corp. various best-selling models such as the all-new X5 Sport Activity Vehicle, the 7 Series luxury flagship sedan and the soon-to-arrive new M3 that has more power and torque but reduced fuel consumption by 25 percent.  BMW, by the way, is entering the more accessible market segment with new models like the 2 Series, which will be launched in the Philippines in 2015. Even though the Philippines ranks only sixth among the Asean countries as far as total BMW sales go, it has the second biggest population and that means a big potential market in the future.  As of today, BMW sells more cars in Malaysia, Thailand, Singapore, Indonesia and Vietnam than in the Philippines.

 

Solero said that while BMW is the leading premium brand in the Asean and wants to retain that title, it also wants to be known as the leader in sustainable mobility.  In closing, Segler remarked that in the Philippines, the people love cars as much as people in Italy and Germany do. “Filipinos love cars, so they deserve the right to drive cars if only taxes and duties were better planned,” Segler said. “Filipinos deserve to enjoy the innovations of BMW cars.”