BMW Learns the Hard Way, or Did They?

Detroit. In news that shocked absolutely no one, BMW AG promoted Chris Bangle to a new position last week - Director of BMW Group Design - in which he will supervise all of BMW's brands (BMW, BMW M, BMW Motorcycles, Rolls-Royce and Mini). His new position removes him from day-to-day, "hands-on" control of BMW brand design. Adrian van Hooydonk, a 40-year-old who had been head of DesignWorksUSA, BMW's California design studio (and a Bangle disciple), will take over direct control of all of BMW brand design.

If BMW fans are expecting instant improvements or drastic changes - they shouldn't bother. Adrian van Hooydonk was responsible for the look of the current 7 and 5 Series cars, under Bangle's tutelage, and the lead times for any design changes are, of course, notoriously long. Even if the planned "freshening" of the 7 Series (a nonevent by all indications) is due soon, the basics of the shape will remain intact for several years to come.

The real story behind the story is that of BMW's stubborn refusal (until now) to acknowledge that Bangle had become a lightning rod to its loyal customers, to the media and even to some within BMW itself - and had cost the company tons of ill will and a trainload of horrendously bad PR that has damaged the brand over the last 24 months.

Now, we have said repeatedly here at AE that Bangle's task at BMW was probably the most difficult that an automotive designer could face. There's a fine line between design "reach" and a more evolutionary path for automotive design. Evolutionary is what the new C6 Corvette represents (a disappointment to many who were hoping for more of a "new century" look), while the Cadillac look pioneered on the Evoq concept from several years ago represents "reach" in its ideal form - a look that not only repositioned the brand's "presence" on the street, but one that repositioned the Cadillac image for the next decade, at least.

What Bangle attempted to do by "reaching" with BMW's "next" look was an admirable, ballsy move. But taking an iconic automotive brand and moving it forward into the future is a perilous undertaking, at best. Get it right, and you're a hero. Get it wrong, and you're asking for a world of trouble and relentless second-guessing from just about every faction imaginable - customers, dealers, the media, financial analysts and even fellow designers (although most of them, out of professional courtesy, when asked, kept their criticisms to themselves). But when given the opportunity to comment "off the record," most design pros will tell you that Bangle's motivation and direction were spot-on - but that his execution was a flat-out disaster of gigantic proportions.

Needless to say, we feel that Mr. Bangle got it wrong, and he got it wrong in such a big way that it has actually cost the brand dearly. His executional mistakes did nothing less than knock the BMW brand off of its pedestal, and left BMW executives scrambling to deflect questions and comments at media sessions that were supposed to be devoted to talking about the inherent goodness of BMW products. It wasn't just a distraction for the last 24 months - it was the only topic that the mainstream media seemed to regurgitate as if on cue. We even came to expect the word "controversial" and Chris Bangle in the same sentence as a standard lead-in to any story that appeared on BMW. That was more than a distraction; it bordered on image paralysis. And that, combined with BMW engineering's near missionary-like zeal to burden their vehicles with electronic overkill, derailed the brand from its raison d'etre. Instead of giving the driver the ultimate driving experience, BMW's overemphasis on electronic driver aids placed the driver one step removed from the control and "feel" that BMW is famous for.

If anything, this episode should remind everyone in the automobile business of the power that design holds over this industry. On the one hand, great design can move product, create "buzz," and totally rejuvenate and solidify a brand's "street" image. On the other hand, design failures can absolutely decimate a brand and erase years of carefully crafted brand image-making.

BMW created this new executive design position for Chris Bangle for two reasons: 1. It is an elegant way to get him up and out of the line of fire, and 2. It relieves them from the burden of having to admit that the new 7 Series, in particular, was an unmitigated disaster that has cost them money and seriously hurt their brand image.

But did they really learn anything from all of this? I seriously doubt it.

BMW has become such an arrogant company, what with the upcoming canonization of CEO Helmut Panke in a new book (Driven: Inside BMW, The Most Admired Car Company in the World, by USA Today reporter David Kiley), that it not only refuses to admit to its missteps and failures, it is absolutely convinced that they know everything there is to know about who they are, and what they represent in the market. And because of this infallible attitude, they can't see things coming unraveled around them, and they actually believe that nothing is wrong and that their success will go on indefinitely.

I've taken serious umbrage with BMW over the last several weeks for a litany of reasons - starting with Chris Bangle's mangling of their design integrity and the fact that they seem to be hell-bent on making people forget why they should buy a BMW to begin with.

And after the Detroit Auto Show, I said that BMW is on the verge of a long, slow slide into brand oblivion and that if they're not careful, they will be in danger of joining Mercedes-Benz as the poster example of a classic case of brand erosion.

I believe that even more today.

Thanks for listening, see you next Wednesday.

 

Too much too fast? BMW gambles with four launches in six months
Automaker says it isn't worried about dulling a sharp image

By DIANA T. KURYLKO | Automotive News

Slow sales of the new 5 Series last month and a switch by some X3 buyers to the X5 have analysts wondering whether BMW is trying to do too much too fast.

The automaker is juggling four launches in six months, the biggest deluge of product in its history.

BMW recently replaced the high-volume 5 Series and face-lifted the X5 SUV. It also is launching the smaller X3 SUV and preparing to bring out a new 6 Series coupe and convertible.

But there are marketing issues to settle. The X3 has about the same amount of interior space as the X5 and is in the 3 Series price range. Meanwhile, BMW executives have long worried about 5-series/X5 cannibalization and whether the new 6 Series could lure people out of the 5 and 7 Series.

The lower year-on-year sales of the 4-month-old 5 Series in January raised eyebrows. The X3 is off to a good start, but there are concerns that it will overlap with the X5. Dealers say some buyers who ordered the X3 decided not to wait several months for the small SUV and bought an X5 instead.

BMW executives insist that the four new models won't muddle its image or cannibalize sales. "Every product is quite different than the other, and that gave us an ability to do differentiation in marketing and positioning," says James McDowell, vice president of marketing for BMW of North America.

BMW is trying to make the brand more affordable while reaching into even higher price segments, says Susan Jacobs, a consultant in New Jersey who follows the luxury market.

"Part of the product strategy is to maintain the appeal with the baby boomers at the top end and to broaden their appeal to the baby boom echo, households now under 25 years old."

Jim Walker, owner of Kenneth Hammersley BMW in Lynchburg, Va., says, "The X3 in particular is in a unique segment and priced on the money."

Walker says he has sold three X3s and has orders for six more. He says he usually sells only 15 BMWs a month.

The new 5 Series debuted last fall with a controversial rear-end design and a simplified version of the iDrive controls for climate, navigation and entertainment. Both were modifications of divisive elements on the 7 Series.

Peter Schmidt, an analyst with research group Automotive Industry Data in London, says the controversial styling could limit 5 Series demand.

"The product strategy has been exceptional," Schmidt says. "They have the right vehicle in the right segment at the right time. But the styling question will determine whether BMW will come out as the unchallenged winner in the luxury segment."

U.S. sales of the 5 Series dipped 4.8 percent in January to 2,675 units compared with the same month last year. The 5 Series was up 14.2 percent in December and 34.6 percent in November.

McDowell says the January slide was because of frigid weather that kept potential buyers away. He also cites short supply of models with optional features, such as the $3,300 active steering and the $1,800 navigation system. He says demand for the handling feature may level off because 65 percent of the initial 5 Series buyers are enthusiasts who want the latest technology.

But some analysts say the almost simultaneous arrival of an updated X5 could be affecting 5 Series sales.

The X5, BMW's first SUV, was face-lifted last fall, 3½ years after it went on sale. BMW not only updated the exterior and interior but also added an intelligent all-wheel-drive system called xDrive. But it could do little to improve the X5's interior room with a face-lift.

The X5's interior room is similar to that of the smaller X3 that went on sale in January. The X3 has 1.5 cubic feet less interior space than the X5 and 2 cubic feet more in cargo volume. A larger X5 "is possible because we now have the X3, but that won't happen for several years," McDowell says.

But with X3s trickling into dealer showrooms, McDowell says the X5 hasn't lost its appeal. BMW nearly ran out of X5s at the end of December.

The X3 is targeted at buyers who haven't bought a BMW, raising the question of whether this less expensive SUV will lure customers away from the 3 Series. It's priced at $30,995 for a base model with a 2.5-liter engine and the awd xDrive system as standard equipment. In comparison, the 3 series starts at $28,795

BMW of North America projects sales of more than 50,000 X3s during a full year of sales, about 10,000 units more annually than for the X5.

Sales started Jan. 20. McDowell says BMW has a backlog of between 1,500 and 2,000 orders. Dealers say some buyers decided not to wait for an X3 and took an X5.

Tom Purves, CEO of BMW of North America, says the brand is watching for signs of cannibalization. But he says there was similar concern about the X5 and the 5 series when the SUV debuted in 2000.

"We managed to sell 40,000 X5s (a year) and increased 5-series sales," Purves says.

The 6 Series coupe and convertible both debut March 26. There is already a waiting list "that has to be awfully close to the first-year's production," McDowell says.

The 6 Series coupe is priced at $69,995 and the convertible is $76,995. Total sales of both vehicles in the United States are expected to be about 10,000 cars annually.

Potential 6 Series / 7 Series cannibalization is a smaller concern than overlap among other new models, McDowell says.

"The 6 Series competes with taking a sailboat vacation in the Caribbean or an addition on your home," he says. "It isn't like someone says, 'I have to go out and buy a full-sized coupe today.' They wait until there is something that appeals to them."

 

To say that BMW is an arrogant company, if anything, is an understatement. I won't rehash everything Chris Bangle has done.....LexusLuver has done a pretty good job of that. But....concerning the infamous I-Drive, Chairman Penke is on record.....and I quote....' The public is just going to have to get used to this technology . It is going to be the wave of the future, like it or not. That's the way we're going to build our cars.'
.....Say WHAT?... ... Excuse ME, Mr. Chairman.....Have another sip of that overpriced martini, bend over, and kiss my a--. We don't HAVE to buy your cars......sport sedans, Alps-carvers, yuppiemobiles or not. LOTS of other good companies out there (like Lexus) are waiting for our bucks....and generally treat us like humans.

The only other auto company anywhere near this arrogant is Porsche....but I have never heard a Porsche official, at least in public, ever talk like this.

 

This level of arrogance is not new, limited to the top echelons of the company, or something they seem to care about. My wife was quite turned off when we had our Bimmer at the attitudes of people in the service departments we visited regularly. One service manager condescendingly told her that "these are complicated machines, ma'am, and you have to expect them to break down occasionally." Funny, our complicated Japanese machines have never had reliability problems (which she pointedly told the guy).

This attitude even extends to BMW owners (not all of them, of course, but it does seem to be part of the brand image). The magazine for members of the BMW Car Club of America is called the Roundel, and every month in the letters to the editor section there were a few letters from disgruntled owners. The bitingly sarcastic replies surprised me, but the attitude very clearly came across as "We all own the ultimate driving machine, and if you're too dense to realize how lucky you are then you don't deserve to be part of our clique."

One other thing that bugs me about that interview--does that BMW executive think that real people take $70K vacations to the Caribbean? How out of touch is that?

 

Yes, the attitude does spread sometimes to BMW owners, too.....not so much now as in the past. The Chris Bangle specials have embarassed a lot of BMW owners and brought them back down to earth..
Here in the Washington D.C area, especially on the infamous Beltway, the Bimmer jocks used to clearly be the most irresponsible drivers out there. But lately, they have been superseded by the Mustang GT crowd. Many of the most horrific accidents around here, especially with teen-agers, involve Mustang GT's, SVT's, and Cobras.
But Bimmer jocks are not all an arrogant group. Many are good, hard-working professionals that just like a car with a good combination of luxury, sportiness, steering feel, and handling.....and for these features, it is hard to beat the pre-Bangle cars.

 

BMW owners can get pretty cocky too
http://216.118.109.8/m3forum/showthread.php?t=18349

 

Wow, that M3 forum was pretty sad. I've never seen so many people afflicted with SDS in one place.

 

wow i just looked at that forum it went on forever. i'm glad we have club lexus, it helped me decide which groupi want to be a part of.

 

I'll bet this is the same group of people who wonder "Why do people hate on us all the time?"

 

Read 8 pages of that mess and it really makes me appreciate all the polite folks here at clublexus.

James

 

Ive noticed the more smartass owners tend to know the least about their own cars and much less about any others. I could understand lack of knowledge if someone owned let me say an Enzo or GT2 but an M3...give me a break.

 

For what an Enzo costs ( and that's LIST, not including dealer markups) you could buy around 19-20 Lexus IS300's or ES330's....and the Enzo probably will not be anywhere near as reliable. If that's what you consider lack of knowledge, I would agree with you. Only an idiot, in my opinion, would dump 650K into a car.....or someone with more money than sense. That amount of money, instead, could fund quite a retirement nest egg.
Now, having said that, there ARE people who DO put that kind of money into cars and car collections....Jay Leno, especially ,comes to mind, but, obviously, he can AFFORD it.....his retirement is already taken care of.

 

 

Well, the sales chart, at face value, seems to tell us several things. Since it starts with BMW, the sales drop, while not yet huge, is probably due to the Chris Bangle cars and the brand's increasing reputation for unreliability and high maintenance costs. Ford and GM each hold 20-30% of the total market due mostly to the huge number of trucks and SUVs they sell and the fierce loyalty of Ford F-150 and Chevy Silverado truck owners. VW's big sales drop probably reflects BMW's to some extent.....the brand's increasing reputation for defects and poor dealer service. Isuzu's huge sales drop and small market share would help feed some of the rumors that it may soon pull out of the American market (but this is not a given yet)....the Axiom, in particular, not sold well at all. Mitsubishi's sales drop is probably the effect of the Outlander's and Endeavor's frumpy styling....the public has not taken well to it.

Now...the Porsche's huge sales gain....I can't explain THAT one....I can't even guess. Anybody else want to try that one?

 

I dont think the Cayenne existed last yr during this period. They're everywhere



It's interesting to watch infallible BMW encounter some problems. Poor BMW. All it took was one madman with a psychotic vision to ruin their image