. 6 July 2019 by Steve Hanley
Klaus Fröhlich, Head of Research and Development at BMW, lamented to the press a few days ago that nobody wants to buy electric cars. As it turns out, nobody wants to buy BMWs when the company's current financial data provides evidence. According to the Toronto Star, BMW has expanded its position as Germany's leading manufacturer of luxury cars in recent years and is under heavy financial pressure to develop electric cars and self-driving cars that can compete with Tesla and other manufacturers.
Now, the current contract for his CEO Harald Krüger will not be renewed if it expires next April. The company has just reported the weakest result in ten years, having achieved some of the highest profit margins in the automotive business in years.
Krüger was elected head of the company in December 2014 after his predecessor Herbert Diess, unexpectedly left to take the reins at rival Volkswagen. In a press release he said: "After more than 10 years on the board, more than four of whom are CEO of the BMW Group, I would like to pursue new career goals and bring in my diverse international experience for new projects and ventures.
It is common for German companies to renew the contract of the CEO one year before its termination. When BMW did not do so in April of this year, it was speculated that Krüger would resign at the end of his contract, instead of signing up for another five-year term.
BMW was once considered a leader in the field of emerging electric cars When the company launched its highly innovative BMW i3 electric car in 2013, it could not exhaust its lead when struggling to find a way for electric vehicles.
Kruger is "too cautious," says Ferdinand Dudenhoeffer, director of the CAR Center for Automotive Research at the University of Duisburg-Essen The Star . "BMW was unable to take the lead for a new generation of electric vehicles."
David Bailey, a professor at Birmingham Business School, said CNN that BMW had to accelerate its entry into new vehicles technologies. "[Krüger has] has done a great job in recent years, but BMW faces great challenges. They felt the need to engage someone new given the scale of the challenge.
The Tesla Effect
Management and customers have not forgotten that the Tesla Model S is the best-selling luxury car in Germany today. That's as embarrassing for BMW as it is for Mercedes-Benz and Audi. We may never know exactly how the changes in the marketplace caused by Tesla have affected the fortunes of these companies, but it is beyond doubt that this has unsettled the industry and forced companies to accelerate the impending revolution in electric vehicles than it would otherwise. Tesla Model S. Courtesy of Tesla
BMW has recently received not only a US $ 1.6 billion antitrust fine from the EU authorities, but also an increase in tariffs for vehicles Ex factory to China were exported to South Carolina because of the customs war between the US and China. In March, it downgraded its earnings projections for 2019 and announced a cost-cutting plan that would allow a $ 13.6 billion cost reduction by the end of 2022. This plan focuses on hiring some models and streamlining vehicle development.
Bankwupt? says hurry to get electric cars on the market, but in fact it's difficult to take such statements seriously if your R & D leader says that nobody wants to buy electric cars. At CleanTechnica we have been saying for a while that some traditional car companies may drop out of business due to the arrival of electric vehicles or be forced to join forces with other companies.
BMW and Mercedes have been involved in the development of electric cars and self-driving cars, a sign that consolidation in the industry may already be underway. If BMW does not continue the development of competitive autonomous electric vehicles, it could even be the first traditional automaker to go bankrupt – but it probably will not be the last.