VW purchase stake in BMW's CF partner

[footie]

First and foremost it's not over until the fat lady sings and who knows, in retaliation Daimler and BMW may form some sort of an alliance going forward.

I see this as the only future for both Mercedes and BMW to compete with the giant that is now VAG. No need repeating this but Piech is probably the most astute person in this industry and the most ruthless and if VW is eyeing BMW once again then it might be smart to seek an alliance with Daimler.

It sure is nasty play, no denying.
And it sure is a threat to BMW.

But that's how business is, especially when personalities like Piëch are involved. That guy is a ruthless genius. He made an empire out of VW, outgunned all those who stood in his way (see Wiedeking...).

I'm going to follow the next suit of events with great interest, and sure hope BMW will find a suitable solution.

Oh he definitely is a genuis, maybe not it the way some might think but he has turned VW into the strongest motoring brand and he's platform sharing was pure genius, history is wrote by the victors so in 20-30 years from now it will be interesting to see how this situation is remembered.

 

[EnI]

Does anyone know of any relationship whatsoever between Gordon Murray Design's iStream process and BMW i. Or is every f@cking innovation these days prefixed/suffixed with a little "i"?

Look, I'm not an industry insider, so I have no vision around around the potential for Project i. What I do know is that everyone is working toward a similar ideal of:
- Reduced weight [Everyone's looking at CF mass-production]
- Reduced reliance on fossil fuel [So far, nothing less than token attempts from all car makers]
- Reduced emissions [Well, what's new?]

So what exactly is so revolutionary about BMW i? I don't know. Not many people do. So, until I get to see it, understand it and buy into it, I can't really comment with any authority on the impact of this move by VAG. Storm in a teacup perhaps?

Hi, Martin.

Regarding the i ... i is widely known & renown trademark connected to BMW (2002tii, 318i, iDrive etc). Even from pre-iMac, iPod, iPhone & iPad times. It has a rich heritage within BMW history - almost the one M has. Definitely much more than eg. X or Z. Therefore a decision to make it officially a sub-brand (or at least a Series) is quite logical. At least to me. since - as said - "i" has been linked to BMW for ages!




Why it is so revolutionary? No, not the idea. Everybody has the same idea - as you have found it out correctly. Not the tech, and not the design, and not the ... Why is so special then? Because its almost a reality. It's like a Prius. Nobody really believed in a hybrid car. Many say it's unnecessary. Some claimed small cars are not possible to be hybrids due to expensive tech etc. But Toyota had money & guts to go ahead, delivered Prius, and it proved to be a huge success. And Toyota got the accolade of the hybrid pioneer & master. Although it could be any carmaker if having guts to do Toyota did.

It's the same case with CFRP electric cars. BMW has taken a risk, and it's becoming a reality. And now the others have found out they are lagging behind a lot. And now everybody is joining the bandwagon. Establishing their own partnerships, JVs, strategic alliances in the field etc. While VAG decided to pull the ace out of BMW's hands to get better cards, and to become a more serious player in the field.

Why SGL? SGL is the CF production leader, and has taken CF production the the very edge of mass production levels. And many other CF specialists who are realtively on par with SGL are already taken (for partnerships) by other carmakers. And when the only alternative for VAG is to snatch a CF specialist, why not going for the best one. And they have gone for it. Although it's been already taken.

In the end SGL shareholders & the Board will decide what to do in the future: to stay partners with BMW & SKion, or jumping under mighty VAG umbrella. After all ... VAG is much bigger company than BMW, with higher demand, therefore being better potential partner & customer. And then VAG will be in position to decide what SGL's tech & what CF quantities & at what prices will be sold to the rival carmakers.

In the later case it's possible BMW buys SGL's share in the JV company, and make it BMW-owned only. And then trying to snatch CF engineers from SGL, trying to built its own CF company from scratch. CF production wise BMW already posses the know-how, what they lack is the further R&D expertise (incl. new production processes). That's the only alternative if VAG starts bidding war for SGL. Which is expected to be done in the next months.

I don't think 1st generation of i3 & i8 is in danger. The process is already too far to be terminated or endangered anyhow. But the next generations of i cars, further CF know-how, new solutions etc. can be in jeopardy, and so BMW has to find the alternatives if necessary. I guess the tomorrow's meeting is all about the plan B. I'm reading SKion CEO, and the CEO of BMW's + SGL's JV company will be there as well.


PS: can somebody be so kind and move this thread to the Automotive Business News section please. Thanks.

 

[martinbo]

Hi, Martin.

Hi EnI, nice to see you back mate.

 

[Mr. Mercedes]

BMW and Mercedes should work together. They need to work together.

The economies of scale and ability to ammortise R&D so efficiently within the group make VAG a deadly opponent. Audi will continue to gain ground in leaps and bounds as a result.

BMW and Mercedes need to overcome their arrogance and cooperate on strategic technolgies. At the end of the day these two long standing competitors are the most suitable bed mates for both companies. At the moment both are spending fortunes on the same technologies to reach the same outcomes.

What VAG has done here with SGL is very underhaded, however the true implications of this move are yet to be seen or understood in full.

BMWi does appear to be a big marketing spin at present. Only when actual product comes to market will we understand if this is actually the case or if it really is representing something revolutionary. But BMW have over the past decade proven to be master as marketing spin.

 

[EnI]

Sure BMW i cars are not a space shuttle, or an extraterrestrial technological wonder. They will sure look exotic when introduced but most revolutionary stuff will be hidden under the skin.

BMW i is set be the Prius of this decade. Sure the hype is overdone, but the product is formidable nevertheless. As it was the Prius. It was an instant success.

When industry is trying to change people's habits with the new tech, it's always down to marketing. Inception works!

Is Lady Gaga really such a great artist & entertainer? Or is it just a hype? If so ... why it works?

Don't underestimate the results of great marketing activities. Sure the results can't last forever, and frequently the strategies & tactics have to be changed, but they give you an image, an advantage over rivals. Why? nobody really knows. Sometimes marketing - although supported by statistics & math - is more of an intangible matter. More a game of chances. A lottery. Comprehension of psychological processes give marketing specialists great freedom to manipulate (or as I say it: "freedom to create a parallel reality"), and therefore greater chances to succeed.

BUT ... BMW i is not just a vanity project based on thinking "Oh, lets make a funny looking expensive electric car made of exotic materials." There are some places on earth where such vehicles could actually work. Not everywhere, not for everybody. But for some definitely. It's another niche for ... a product for specific niche lifestyle. Which can easily become a mainstream in the future. The world is changing faster than you all can imagine!

What's great marketing? When you make a product for x people who really need & want such product, and when a product is already for sale you are able to convince another x to buy it because they either "need" it, or because it's hip, or whatever.

Do we really need all the stuff we buy? Obviously we do somehow. Otherwise a human being would have stayed in the cave satisfied with life & stuff there.

Electric cars, hybrids, fuel cell cars etc .... The fact is oil reserves are limited. They won't last forever. And humankind has to find other energy source to power the automobiles. Sooner rather than later.

 

[TheDriver]

I reckon Volkswagon has done this as a damage limitation exercise, they know full well that BMW has the jump on just about everyone, including their own premium brand of Audi and they need to catch up pretty damn quick. But without seeing and understanding what technologies they will introduce with this new i range I don't fully understand it's importance as I see it the whole Hybrid thing is more hype than any real benefit, most magazines in Europe have compared it to the best in diesel technology and found it wanting, so will this be any different or is it's appeal only for city dwellers and America or does it have real genuine appeal and benefits for the rest of us?

 

[Sunny]

I reckon Volkswagon has done this as a damage limitation exercise, they know full well that BMW has the jump on just about everyone, including their own premium brand of Audi and they need to catch up pretty damn quick. But without seeing and understanding what technologies they will introduce with this new i range I don't fully understand it's importance as I see it the whole Hybrid thing is more hype than any real benefit, most magazines in Europe have compared it to the best in diesel technology and found it wanting, so will this be any different or is it's appeal only for city dwellers and America or does it have real genuine appeal and benefits for the rest of us?

I3 and I8 are not hybrids, they are completely electric.

Edit: Have no idea what I was thinking when I wrote that, but anyway I am wrong, I8 is a hybrid. I3, I have no idea.

 

[Human]

Just typing one of my many thoughts - We all now the enormity of the Borg Empire, hindsight - so is Daimler, maybe even more of a giant Zetsche and friends could tip the scales any day.

 

[TheDriver]

I3 and I8 are not hybrids, they are completely electric.

Edit: Have no idea what I was thinking when I wrote that, but anyway I am wrong, I8 is a hybrid. I3, I have no idea.

If they had been fully electric then that would have ruled them out entirely by my reckoning, until recharging times drops to the level where you could sit and drink a cup of coffee while awaiting and then continue on your journey then it's dead in the water.

I think I have a rough understanding of the i8, I hope I'm right in thinking that it combines both petrol and electric motors to provide maximum acceleration but switches between the two depending on driving style, speed, throttle position and traffic conditions just like all other so called hybrids. The i3 might be the same only scaled down in size but it be different where as it's petrol engine only provides charge for the electric motors that do all the propulsion, but for this to work the combining weight must be exceedingly low. The key to all of this must be the cost of producing a CF shell at the kind of prices that makes it financially viable for a small citycar to command a retail price similar to it's conventional rivals so an average families could seriously consider it instead, SGL must have made this work which makes them very hot property and why VW has their eye on them.

 

[EnI]

I reckon Volkswagon has done this as a damage limitation exercise, they know full well that BMW has the jump on just about everyone, including their own premium brand of Audi and they need to catch up pretty damn quick. But without seeing and understanding what technologies they will introduce with this new i range I don't fully understand it's importance as I see it the whole Hybrid thing is more hype than any real benefit, most magazines in Europe have compared it to the best in diesel technology and found it wanting, so will this be any different or is it's appeal only for city dwellers and America or does it have real genuine appeal and benefits for the rest of us?

Such type of vehicles are not everybody's deal. Hybrids & EVs are made for metro areas particularly. Where there's a lot traffic jams, slow in-queue drivings, etc In such cases EVs & full hybrids make sense.

Hybrids & Evs are considered to be a metro mobility solutions. And no, not every big city is automatically in the metro category.

Do you guys have any idea whats going on in the big Asian cities (and even more specifically: Chinese cities) traffic wise? Obviously not. I advise you to educate yourselves. Use google.

Sure average Joe, average Pierre, Luigi, Carlos, Hans, Dimitri, Bjorn, Franc etc. doesn't fully understand the purpose & point of such cars. Since he is not (yet) in a situation to really need it.

Guys, Asia - led by China - with gargantuan metro areas is overtaking Europe & US right now development wise. That can be seen in the infrastructure as well. And also in the new concepts of mobility that have been already in use (eg. magnetic bullet trains etc), and the ones in the making. And this mobility mini revolution is also hitting the personal mobility aspects - the cars.

BMW - I must say Bangle has had quite an influence on that - realized very early how the trend is developing. Therefore all that "mambo jumbo" Bangle preached about shifting paradigm in (personal) mobility etc etc. But that isn't mambo jumbo at all. It's really. BMW / Bangle were just one of the first ones in automotive industry recognizing such a trend, and stated to take it seriously.

I'm surprised VAG - with all that omnipresence in China via VW & Audi - didn't recognized that trend earlier. I guess their thinking & point of view was just too ... German?


Why the BMW i is so revolutionary - although the i cars are "just" hybrids or (ER)EV?

Because the whole architecture is now different. All the platforms are new. Usually carmakers use conventional platform, and adjust it to fit the hybrid or EV tech. But such platform has its limitation, since its made for a conventional car with internal combustion engine as primary powertrain.

The i cars are made specifically for electric powertrains. The locations & positions of specific powertrain, drivetrain, energy / fuel tanks parts are different than in the conventional car. Also the aerodynamics is more important - and the form follows function.

Not to mention the use of CF - not to make cars lighter but to not make them heavier! Mind battery packs are still heavy as he*l. And with extensive CFRP usage the vehicle's weight can stay on a level of a comparable conventional car of same size. If steel or aluminum are used for body & chassis, the car is just to heavy.

Mind CFRP only make the conventional cars lighter - when there is no additional weight added due to eg hybrid drives & battery packs, but only conventional powertrain & drivetrain are used, while lighter CFRP replaces heavier alu & steel.

CFRP used in EV / hybrid cars is used to preserve the normal weight, not to make a car ultralight. Current battery tech prevents EV cars from being lighter. Scientists & engineers are rapidly looking for new solutions & tech how to make batteries smaller, lighter yet more efficient. Unfortunately the best solutions can only be obtained when some exotic rare earths are used. Which are ... rare, and therefore expensive.

BUT ... the serial production of EV gives engineers & scientists motivation to find better solutions.

Remember first cars? Remember first planes? Remember first PC? Remember first cell phones?... And now compare them to the today's products. Sure fresh innovations are usually awkward and not optimal at all. But in a short time (eg in a decade or two) the tech progress is usually significant!

EV / hybrids are far from being just marketing farts. They are just ahead of time, and still in the initial phases of lifecycle, and therefore not optimal - therefore people think such cars are pointless or even useless. But early adopters will make the tech to develop, and the products becoming more optimal with years. As usually.

C'mon guys. I would expect more pioneering & exploring adventurous spirit - regarding the new tech & solutions. After all - we are the car guys. We should have been celebrating new tech & new solutions, the new bold achievements of engineering etc. Celebrating the tech progress, celebrating the future.

Where has all the optimism & excitement gone? Really, some of you still sound like 80-year old grandpas (no pun intended, real grandpas) complaining over novelties & new tech. To be honest ... I'm bit disappointing to see such mood among youngsters.

 

[TheDriver]

Are you saying the problem is we haven't experienced the likes of big cities in Asia so can't quite see the benefits of these cars because they don't quite fit into our daily lives as yet?

By the sound of it you feel Asia is the next big market and first to succeed there will capture the biggest percentage of this market for quite a while. I wonder will BMW's i range be as revolutionary as to become the recognised name for such cars in much the same way as we think of a Bic when we think of a ball-point pen or Hoover when we think of a vacuum cleaner.

 

[nalyd]

Thank you martin!
I thought I was the only one here not being blow-away by the "revolution" everybody says BMWi is...

Not seeing what the fuss was about, with two mere concepts that bring nothing particular to the table besides the idea of reducing weight with carbon-fibre and having an electric powertrain... which every carmaker is working on anyway...

Maybe it's the blue glowing nostrils that impress people so much...

Personally I do not think that the actual vehicle technology is what BMW i actually stands for. Sure the cars are going to be leading edge and impressive, but revolutionary, I think that is a concept dreamed up by the fanboys.

The LifeDrive platform seems to have scaleability and economy in mind whilst allowing for the carbon-fibre cell to be protected. This seems to be a sensible approach not dissimilar to what McLaren have done with the MP4-12C.

What has impressed through is the approach by BMW with the i sub-brand. It is actually centred on a mobility eco-system that the vehicle is just one small part of.

This article (and the links from it) sum up the concept quite nicely. I for one am impressed with the approach and it certainly looks to be have incredibly well conceived.

As for a revolution in vehicle performance and dynamics, I think that it quite a short-sighted expectation. Although I really am interested to see the final design and specifications (which should be right at the cutting edge of possibility).

PSFK » Will New BMW i Sub-Brand Transform Mobility?

Regards,
Dylan

 

[EnI]

Are you saying the problem is we haven't experienced the likes of big cities in Asia so can't quite see the benefits of these cars because they don't quite fit into our daily lives as yet?

Something like that. And not only what's happening there RIGHT NOW, but also what's happening with trends ... what will happen in the near future. What kind of development visions, strategies, plans the metro authorities have regarding transportation etc. China is VERY administrated country. And far from being centralized! Common / public interest has precedence over the private one there. Sure on micro level people are still very individualistic. But on macro level there is much more collectivism present. It's a tradition there ... not just a reminiscence of Communist era. It's there for centuries if not millenniums. The mindset is different. More "ant-like".

We, the Westerns, think we can drive anything we want. And the "evil authorities" have no right to intervene, and obstruct our decisions & habits. (But still they do: eg. regarding drugs - including drinking alcohol & smoking tobacco). But new rules & standards are introduced daily yet facing resistance among people here, and therefore it takes some time to push them through. Not to mention the lobbies usually counteract - since new rules can have negative influences on their business.

A combination of capitalism & big omnipresent collective & authoritarian state is a very formidable political combination of two very effective economic & political systems! China is a living proof. But I still would not like to live there ... I like my freedoms too much. I can't imagine not being able to access anything I want on internet ... or having freedom & right to be unbiasedly informed, having rights to protest, speak, act politically etc.

By the sound of it you feel Asia is the next big market and first to succeed there will capture the biggest percentage of this market for quite a while.

For such types of vehicles definitely. And also for others as well. Although one can never know what kind of administrative hurdles can especially Chinese administration come out with to regulate the market - on supply AND demand side. It's still not even remotely a laissez-faire there.

I wonder will BMW's i range be as revolutionary as to become the recognised name for such cars in much the same way as we think of a Bic when we think of a ball-point pen or Hoover when we think of a vacuum cleaner.

I don't think the cars are so revolutionary to do be able to achieve that. They are still cars. Not space shuttles! But BMW brand will certainly got recognition of being the pioneer for such type of vehicles. Like Toyota got it for hybrid cars. Nobody says prius instead of hybrid, but everybody knows Prius is THE hybrid. Perhaps BMW i cars will be considered THE electric vehicles. Who knows ...

What has impressed through is the approach by BMW with the i sub-brand. It is actually centred on a mobility eco-system that the vehicle is just one small part of.

Yes ... it's more about the philosophy ... more about the paradigm. Therefore all the "mambo jumbo" about sustainability, connectivity, "responsible individualism" etc. It may sounds very alien here, but sustainability philosophy is very popular in Asia especially.

And - since Asia (due to China mainly ... also India etc) is becoming more & more dominant economical player in the global economy, we are already witnessing the influence of oriental philosophies - via the economic system, via the products & services. Just like Western life-style influenced contemporary Asia due to West dominance in the global economy, we well get the counterwave from Asia now - their life-style influencing ours. It's inevitable process in these globalized times. Cross-influences are present all the time ... yet at one point one influence is prevailing, at other point the other one.

The problem is - we the Westerns - are observing & comprehending Asia (espc. China) through our Western cognitive matrix. Therefore we find many things there illogical, paradoxical, even weird.

Big corporations have carried out cultural due diligence very carefully & throughly. They know what they are doing. Be sure. It's impressive how some Western corporations have been "thinking Chinese" already.

 

[Human]

^
ENI, for the bigger part of this thread I have mentioned the Koreans a few times and nobody really cares or show interest. Maybe it's a story for another day or thread BUT I would like to know how VAG or rather VW as brand should view the Korean invasion that can be viewed IMO as a 'virus' that can destroy the 'Borg's' domination in that respective market going forward.

Hyundai is the world's largest industrial group with cash to boost and Peter Schreyer former Audi designer did 'Merlin Magic' with KIA's new lineup. Also, Hyundai/KIA said they will match VW's perceived quality in the next 3-5 years.
The Korean group are viewed by some financial analysts to become the worlds no.2 in terms of volume within this decade.

Does VAG see this 'Korean invasion' as a threat?

 

[coolraoul]

I still don't see the point of i.
Okay, build as electric from scratch... Big deal. Okay, CRFP and co, well, that's not something unique, every carmaker is looking into it.

And many carmakers have presented special EV platforms (with batteries on the floor etc).

Nissan or Toyota seem much much more advanced in terms of "mobility concept" than i's totally standard offerings (single-person super narrow cars, new concepts of vehicles..).

I'm sorry, but I don't see what's past this big marketing BS.

The "form factor" of i is totally standard (hood in front of the car, wide two-seats arrangement, standard sizes) so no mobility concept whatsoever here, the "thinking" behind it is the same as every other serious carmaker (electric car bandwagon, CRFP trend)...

I don't see what the fuss is about. I just don't. Those i cars seem totally conventional in term of concept, to my eyes.

 

[EnI]

i IS PRODUCTION READY!!! Ready for series mass production.

Yes, there were low-volume semi-prototypes available. And all the exotic sci-fi bubble-car concepts everywhere.

But BMW i a reality. No other such project is has come so far in development as i has. Therefore is a threat. To claim the pioneering status of future-ready EV vehicles. Sure it's a marketing category.

Also ... the whole production & sales & delivery & post-sales process will be done by sustainability standards: low energy consumption, usage of green energy, very high percentage of recycled material used etc

It's the whole package is what's somehow "revolutionary" - otherwise it's "just" an EV made of exotic materials.

But here the whole chain, the whole circle around BMW i products will fit sustainability standards. As said: it's not just about the car itself .... It's more about approach, about philosophy behind. That's quite revolutionary for the current automotive standards. It's something - a trigger - that can change the whole automotive industry ... to steer more into sustainability waters.

Consider such cars as "kosher" cars - sustainability wise.

Sure for many Westerns sustainability seems like a total money-wasting thing. An " eco hippie thing". An "eco fanatic agenda" etc. But it's more an oriental philosophy - which is reasonable since human population is rising, and energy & raw material resources are limited. Therefore more careful & planned usage is needed, and a high rate of recycling. It's all about "more reasonable & more effective consumerism".

As said many times by me myself: "If you don't understand something, or can't see a point in it - that does not mean the thing is really pointless." It's a bit too egocentric point of view - claiming that the things you don't understand are pointless ... don't you think?

 

[Human]

BMW i is a 'shit storm' that hit VAG. So Piech & Kie is like a cat on a hot plate - maybe busy with damage control? Did BMW play check-mate?

More-or-less then

 

[EnI]

^
ENI, for the bigger part of this thread I have mentioned the Koreans a few times and nobody really cares or show interest. Maybe it's a story for another day or thread BUT I would like to know how VAG or rather VW as brand should view the Korean invasion that can be viewed IMO as a 'virus' that can destroy the 'Borg's' domination in that respective market going forward.

Hyundai is the world's largest industrial group with cash to boost and Peter Schreyer former Audi designer did 'Merlin Magic' with KIA's new lineup. Also, Hyundai/KIA said they will match VW's perceived quality in the next 3-5 years.
The Korean group are viewed by some financial analysts to become the worlds no.2 in terms of volume within this decade.

Does VAG see this 'Korean invasion' as a threat?

What KIA / Hyundai still lacks - especially in certain markets - is the dealer & repair center network. Having a good product @ right prices is not enough if you don't have enough sales channels to move it.

And here VAG is still just too strong.

Right now VAG is a perfect package. Yet nothing lasts forever. And I'm sure at some point its hugeness will become VAGs biggest weakness.

All that brand-engineering is becoming more & more complicated - more brands, more complex process to run them properly.

And being so complex & integrated is a huge advantage - but also a fatal weakness when / if something starts to go wrong. Because then the whole "body" is infected instantly - instead of a single limb only.

Piech thinks perfect corporate "perpetuum mobile" is possible ... that it can go on & on forever @ incredible pace. But the problem is - as I mentioned - when one cog fails, the whole machine fails. And that's going to happen sometime.

Greed is good. Greed works. But it comes at a price that it can prove to be just fatal.

Not only curiosity can kill the cat ... but irrational self-esteem & irrational ambition (greed?) can also kill it as well. Some would start to doubt mental state / sanity of 74-year old men still doing business. Never heard of retirement? Trying to die a corporate martyr? When ambition becomes an obsession / fixation?

Sure shareholders like it when cash pours. What happens when it stops?

 

[Human]

^
Thank you ENI, indeed we cannot see into the future, albeit there are definite indications as you have mentioned on what can be expected and IMO their are markers changing every week. One major lesson(s) that has been learned recently was GM, Chrysler and speaking of 'if one cog fails' also Toyota with it's recalls. VAG could be tomorrow's next disaster - bad if you do a headcount and think of the people who could loose jobs.

It's weekend, finally! Have a good one friends!

 

[EnI]

No car manufacturer with more than a couple brands in its bag hasn't ever survived intact on the long run.

Will VAG be an exception, or will it meet eg. the GM's, Ford's, Auto Union's fate?

I'm not implying VAG will bankrupt but it will certainly be forced to sell off at least one of the brands, or even being forced to shut it down.

If there is a mighty corporate emperor - a mighty vacuum can appear in the company when he is gone.