BMW's New CEO Is Doubling Down on the Strategy That Got the Last CEO Ousted

Image: BMW

Good luck with that BMW, good luck with that Mini, and wow, a Mitsubishi dealer is going to need a hell of a lot of luck with that. All that and more in the Morning Shift for July 22, 2019.

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1st Gear: It’s a Bold Strategy, Cotton

In what Automotive News is declaring a “bold way forward,” new BMW CEO Oliver Zipse is promising not to make electric cars on a platform that is not explicitly designed for their propulsion system, not because that is better for BMW’s customers but for BMW’s ease of manufacturing:

Zipse delivered a 40-minute talk at the Oxford plant, half of it devoted to why BMW shouldn’t go down the same path as Volkswagen and others in creating vehicle platforms that are uniquely electric. Instead, he said, BMW must have platforms that can go either way.

That has been a topic of strategic debate inside BMW in recent years, complicated by the company’s relatively limited global production capacity.

BMW in June said it will introduce 25 electrified models by 2023. Zipse was at the plant in southern England to present Mini’s first electric car, the Cooper SE. It is built on the same platform as combustion-engine cars that are moving down the same assembly line. He said the cost to adapt the plant was minimal and did not require a big effort.


Mmmm yes, very bold, definitely, definitely, bold. Bold. Bold bold bold.

Former BMW CEO Harald Krueger, who was reportedly fired for what looks to us like this exact same strategy, was apparently not “bold.” We’re not sure what the difference is. This is a very different approach from companies like Volkswagen, which see the future of EVs as needing dedicated platforms Batteries can be laid flat like a pancake across virtually the entire bottom of a car on a dedicated EV platform, enabling much more of them and with better weight distribution, and electric motors can be placed in much more inconspicuous spots than with a traditional piston engine.


Virtually every EV that’s built on an internal combustion platform feels like it’s cut somewhere to build around the existing structures, whether on range, cargo space, or general design.

Anyway, good luck to BMW, building potentially compromised electric vehicles that have trouble with packing in enough batteries because they have to leave space for the things internal combustion cars need, like engines and driveshafts.


Your factories will love it. Not sure about your customers, though.

The strategy makes sense if you, like BMW, believe that EVs are “overhyped” because BMW i3 sales have slowed to a crawl. The strategy does not make sense if you believe, like most people, that the oceans will eventually kill us all as retribution for our polluting ways, and that OEMs will soon be building more electric cars than not, because humanity does not have a choice.


Good luck BMW! You’re gonna need it!!!!!!!!!!!!!!!!!

2nd Gear: Mini Wants More SUVs, Which Tend Not To Be Mini

One of the cruelest jokes that capitalism has played upon us is that Mini is dead, and “MINI,” an outfit owned by the BMW corporation that specializes in expansive family haulers and fun small cars no one is buying at the moment, lives on wearing the original company’s branding like one of Leatherface’s skinsuit masks.


And while BMW has tried, somewhat, to build smaller cars under the brand because that’s literally Mini’s name, it will also build even more large expansive family haulers, according to Automotive News:

BMW Group sales boss Pieter Nota, speaking to Automotive News this month on the sidelines of the Formula E race here, said turning around the Mini business in the U.S. will take new products, including fresh offerings in what Mini calls its Hardtop line.

But new developments also are coming in small crossovers, he said.

“That’s a growing segment,” Nota added, avoiding specific product plans. “Without revealing anything, we will see growth in that segment.”


Now I’m not personally opposed to small SUVs for Mini, in the style of the brilliant Suzuki Jimny. But Mini’s crossovers may need to go even bigger than the Countryman to sell well, which is a shame. You hate to see it.

My personal opinion, I should note, does not matter hear at all. That is because under the guise of capitalism, the BMW corporation owns the “Mini” name, and because of that will do whatever the hell it wants and call it “Mini” anyway, as if it is wearing the original company’s branding like one of Leatherface’s skinsuit masks.


3rd Gear: Ford China is Dragging the Rest of the Company Down

Ford’s Chinese operations are in a massive slump, the Wall Street Journal reports, which is not good! That’s because China is the largest country in the world, by population, which means it is potentially the largest car market in the world. All of that is very obvious if you’ve been following the car industry at any point in the last 30 years, but what is not obvious to people at Ford, apparently, is that Chinese consumers may want different cars than, say, French consumers:

Last year, Ford’s sales in China plunged 37%, much sharper than the broader market’s 3% decline. It reported a $1.5 billion loss in the country in 2018, its first after several profitable years. Ford’s China market share was 2.1% in the first quarter this year, down from 5% the same period in 2016.

Ford executives failed to innovate locally, assuming that a global product strategy successful in the U.S. and Europe would also work in China, said current and former managers. However, rivals moved faster to add new technologies, even as Ford resisted tailoring its lineup to suit the needs and desires of Chinese buyers, these people said.


The idea that “what may be convenient for manufacturing and corporations may not be what is good for customers” is apparently a foreign one to many automakers, though hopefully they learn the lesson soon.

4th Gear: Hyundai Says Its Sales Will Decline And Then Go Up

Hyundai has ground to make up in the U.S. market thanks to years of a sedan-heavy lineup. It will suffer for its sins in the short term, but after that it will make gobs and gobs of money as it comes out with a bunch of new SUVs, Reuters says:

Solid performance at home and in the United States in the three months through June helped offset a sales slump in China, where a slowing economy, trade war with the United States and a lack of competitive models prompted the automaker to suspend production at its oldest factory earlier this year.

To maintain momentum in the United States - its biggest overseas market - Hyundai said it plans to boost the proportion of SUVs in its U.S. line-up to 67% in 2023 from 51% in 2019, as it works to catch up with a shift in consumer preference.


You don’t need to make SUVs, Hyundai. Just make your regular cars with cushier tires. It’s what the people want.

5th Gear: I Admire This Boundless Optimism

Mitsubishi is a car company which, you may be surprised to find out, still sells cars in the United States. It turns out many of Mitsubishi’s potential customers don’t really know that, either, and Automotive News has a profile of a dealership that is on a potentially quixotic mission to change that:

“We still suffer from an awareness issue across the United States,” said Fred Diaz, who took the helm as North American CEO of Mitsubishi Motors last year after running the truck division at Nissan North America. “Some people don’t even realize that Mitsubishi actually sells vehicles in the United States,” he said during a tour of the Lewisville store last week.


Mitsubishi used to build truly great cars, like the Mitsubishi Lancer Evolution, Pajero/Montero, Eclipse, and the Minica Dangan ZZ, which was almost as good as the Minica Lettuce, which was a real car. But now, it does not build great cars:

Greater market visibility also brings greater scrutiny, and Mitsubishi’s current offerings receive middling marks from auto critics such as Consumer Reports. “Every one of its models is an also-ran in our road tests,” it summarizes on its website. “Reliability is mixed, and owner satisfaction is not encouraging.”

Whether Mitsubishi will be able to stick it out long term in a competitive U.S. market is another matter. Worldwide, the automaker sold 1.22 million vehicles last year for an 18 percent gain, but less than 10 percent came from the U.S.


The story about the dealership is a deep dive into What’s Wrong With Mitsubishi Now, and if you like sad dramas I highly recommend this one.

Reverse: Happy 125th Anniversary to the Car Race


Paris–Rouen, Le Petit Journal Horseless Carriages Contest (Concours du ‘Petit Journal’ Les Voitures sans Chevaux), was a pioneering city-to-city motoring competition in 1894 which is sometimes described as the world’s first competitive motor race.

The contest was organised by the newspaper Le Petit Journal and run from Paris to Rouen in France on 22 July 1894. It was preceded by four days of vehicle exhibition and qualifying events that created great crowds and excitement. The eight 50 km (31 mi) qualifying events started near the Bois de Boulogne and comprised interwoven routes around Paris to select the entrants for the main 126 km (78 mi) event.[1]


Neutral: Okay Maybe I’m Wrong

Maybe I’ve got this whole thing backwards. Maybe building an electric car on an internal combustion platform does, in fact, make for a better electric car. I’m not sure how, but surely BMW pays a lot of people silly amounts of money to figure that out.


Prove me wrong.


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