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EfficientDynamics or die, says BMW

Go green: BMW's Guenther Seemann says only environmentally sound motor companies will survive.

BMW Asia region boss says all car-makers must go green despite economic hardship

11 Mar 2009

BMW will survive while other car-makers that choose not to go down an environmental path face doom, according to Guenther Seemann, BMW regional director for the sales region Asia, Pacific and South Africa and former managing director for Australia.

He says the rollout of BMW’s emissions-slashing EfficientDynamics in all future models for Australia will resonate with consumers as they seek lower everyday running costs, and even more so from next year when oil prices are expected to triple or even quadruple.

BMW Australia is the first outside Europe to introduce Efficient Dynamics.

“All our investment in clean energy – which other car manufacturers in Europe did not do – will underpin BMW’s future success,” Mr Seemann said.

“It is more important that BMW brings over the right engines and the right cars for Australia.

“Because it is a new era for the car industry. Car companies that are not taking care of this issue will not survive. Consumers will only buy efficient cars, even if they can afford not to.

“And they are so driven in Australia, where protection for the environment is very high, so that is why we are here with EfficientDynamics today.

 center imageLeft: BMW 7 Series.

“The new 7 Series is an example – a luxury car with 7.2 litres. Nobody could have made this 10 years ago... and the next generation will be below 7L/100km.”

Mr Seemann said BMW Australia had not been sidetracked in its introduction of Efficient Dynamics models by the big fall in oil prices over the past six months, because this was just a blip. Instead, he had prepared the company for a big rise in oil prices and, as a direct result, inflation.

“We are already getting ready for 2010 – when we expect things to go back to normal (oil price wise). On the day when newspapers say that things (are improving economically), we expect oil to go right back up … and then we all have to be ready with different engines.

“When China is back on track it will need nearly all of the oil that will be produced over the next 20 years, and everybody will be affected. It might take 12 months, or 14 months, but cheap oil prices will be over.

“Mobility will become more expensive, and so BMW’s part is to reduce emissions and consumption, so the cost of ownership is reduced.

“At the end of the day, for the consumer, this is most important. We will have inflation again. We will have oil at over $US160 a barrel. It is inevitable.”

Mr Seemann said that achieving a better supply and demand balance would see the company through a turbulent 2009.

And while this year’s BMW volume, and possibly 2010’s as well, would not reach last year’s record sales of 17,263 units, a more profitable model mix would help minimise the effects of the general sales downturn.

“We have to define what is healthy – for me it is for BMW not be overstocked, that we carefully monitor the flow of cars into Australia, that we have an order for a car for a customer before we even build it... so it is a balance of meeting the demand with supply,” Mr Seemann said.

“This year we will sell fewer cars than we did last year. But we will sell a much better model mix. We will sell less 3 Series but we will sell more X5s and more 7 Series.

“In Australia, our dealers are balanced. We have had many good years with BMW, and everybody (in the automobile industry globally) got very greedy, and every year there was double-digit growth.

“But this will not happen in 2009 and it might not happen in 2010.”

Mr Seemann believes the industry downturn will provide new initiatives that will benefit the running of BMW Australia beyond the current crisis.

“This gives us an opportunity to be smarter and more creative to do things differently. We have to increase efficiencies and cost cutting, but these started already at BMW two years ago.

“For example, this year we are not able to participate in F1 hospitality. You can only spend a dollar once, so the money we spent on 400 guests in F1 we can now spend on our customers when they buy a car."Improved customer care is at the core of BMW’s priorities this year, according to Mr Seemann, as everybody in the industry is trying harder than ever to lure people into showrooms.

“Customers today must be treated like a king. In service we really have to be number one. At the moment, due to the worldwide situation, there are deals everywhere in the market.”

But while the pressure is on BMW Australia’s new managing director, former BMW Hellas (Greece) boss, Australian Stavros Yallouridis, to try to maintain volume in a shrinking market, his boss Mr Seemann says that he is not expecting miracles.

“I said to the dealers, when I took office (in early 2007) that in 2011 we should do above 20,000 cars per year.

“This of course will not happen because at the moment is contracting by 20 per cent.

“If the market is down 20 per cent and we are down only 10 per cent, then we are doing a good job.”

BMW sales in Australia in the first two months of 2009 tumbled 20.7 per cent year-on-year, just behind the 21.9 per cent for the whole of the market.

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