Top 10 Car Manufacturers: BMW AG



Colin Pawsey
08/01/2014

#8: BMW AG

A Brief History

BMW’s roots can be traced back to two companies – Bayerische Flugzeug-Werke AG (BFW), and the Rappe Moterenwerke Company – which eventually merged to become Bayerische Moteren Werke (Bavarian Motor Works). BMW’s famous logo has been in use since 1917, and sports the blue and white state colours of Bavaria.

At the end of the First World War, the production of aeroplane engines was prohibited, so BMW manufactured railway brakes and inboard engines until production of the company’s first Motorcycle in 1923, the R32. BMW began automobile manufacturing in 1928 with the purchase of car-maker Fahrzeugfabrik Eisenach, and up until the breakout of World War II, all BMW cars were made at the plant in the Thuringia region of Germany. The first models were built under licence from the Austin Motor Company in 1929, and were superseded by the company’s own designs by 1932.

During the Second World War BMW was classified as a German armaments and war materials manufacturer, and devoted its resources almost exclusively to manufacturing aircraft engines for the German air force. After the war, Allied soldiers requisitioned and occupied the BMW plants and most of the machinery and tools were dismantled. In October 1945 the U.S. Military Government issued a command to dismantle the BMW plants in Munich and Allach, which led to BMW losing the power of disposal over its assets until 1949 (1955 in the case of Allach).

In 1951 BMW developed its first post-war automobile – the 501 – which was built from 1952 onwards. Although not commercially successful, it restored BMW’s reputation as a manufacturer of high-quality cars.

In 1961 BMW premiered the 1500 model at the German Motor Show, which further helped to re-establish the company. The four-door touring car generated orders far exceeding production capacity, and by 1963 BMW was able to record a profit once more. In the mid 1960’s BMW purchased automotive company Hans Glas GmbH, and its production facilities in Dingolfing and Landshut. Both sites were restructured, and the biggest BMW plant in the world was created at Dingolfing over the following decades.

In 1972 the Rosslyn plant near Pretoria, South Africa, became BMW’s first production facility outside Germany. While in 1973 a policy was introduced by sales director Bob Lutz, to take sales responsibilities for all the major markets from the importers of the time, helping BMW to compete on a global scale. The 1970’s also saw the introduction of BMW Motorsport.

The 1980’s saw BMW continue its development at the forefront of technical innovation in the automotive industry, and in 1985 BMW Technik GmbH was established as a think tank free from the constraints of series production. One of the initial projects was the Z1 Roadster, which was produced as a small series in 1988. In 1986 the company brought all of its research and development work together under one roof when it established the Research and Innovation Centre in Munich. It became the first automotive manufacturer to open such an institution, and today it houses some 9,000 employees.

In 1994 BMW opened its first production plant in the USA, in Spartanburg, South Carolina. The plant was designed for production of the Z3 Roadster, which was exported all over the world from Spartanburg. Also during the 1990’s was the acquisition of the Rover Group and Rolls-Royce.

In 2000 BMW realigned its group strategy to focus solely on the premium segment of the market with the brands BMW, Mini (the only brand of the Rover Group retained by BMW), and Rolls-Royce Motor Cars. The new Mini was launched as a premium model in the small-car segment in 2001. In 2003 the new Rolls-Royce Phantom was introduced, with each car being individually made at the Rolls-Royce production plant in Goodwood, England.

In 2004 BMW launched a joint venture in China, under the name of BMW Brilliance Automotive Ltd. The plant in dadong, in Shenyang opened in 2005, and the joint venture is responsible for production, sales and customer support for BMW vehicles in China.

Founded 1916
Headquarters Munich, Germany
Revenue (2013) $103.7 Billion
Pre-tax profit (2013) $10.7 Billion
Employees worldwide 110,000
Vehicle sales (2013) 1.9 Million
CEO Norbert Riethofer

CEO

 photo BMW_CEO_zps34aa89fc.jpg

Norbert Riethofer was appointed Chairman of the Board of Management at BMW in September 2006. He had been a member of the Board of management (production) for six years prior to that, and had also served as President of BMW Manufacturing Corporation, USA, and Technical Director for BMW South Africa.

Having spent his entire career at BMW, Norbert Riethofer is regarded as a loyal and dedicated man, but one who believes in hard work and is prepared to make hard decisions. He states that:

"It isn’t a given that the companies that provide mobility today will also be the ones to do so tomorrow. Every company has to work hard to make this happen. But I’m convinced that BMW is one of those companies".

After his appointment, and in an effort to guide BMW through the economic crisis, he cut BMW’s workforce and set about on an ambitious policy of cost cutting. In 2008 he axed 8,000 jobs and took away paid breaks and overtime bonuses for the remaining employees. He cut Boardroom pay by 40%, and slashed many executive’s salaries by 30%.

He is contracted until 2016, which would make him the company’s longest-serving CEO since Eberhard Von Kuenheim, who was in charge from 1970 to 1993. Widely praised for his cost-cutting and streamlining, his next challenge will be to guide BMW through the development and production of electric vehicles as they work towards their own target of selling 2 million vehicles per year by 2020.

Mission

The BMW Group follows its Strategy Number ONE policy, with its four pillars – Growth, Shaping the future, Profitability, and Access to Technology and Customers. The company’s mission statement up to the year 2020 is that ‘The BMW Group is the world’s leading provider of premium products and premium services for individual mobility’.

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