"At BMW, we don't build vans or MPVs," responded the Chairman of the BMW Group, Zipse, to a question about how BMW's next-generation models will respond to the trend of some Chinese automakers emphasizing features like refrigerators, TVs, and large sofas.
This conversation took place during BMW's 2023 full-year performance communication event held on the evening of March 21st, Beijing time. The media's probing about refrigerators, TVs, and large sofas actually reflects concerns about the future of this luxury brand in the era of new energy vehicles.
Despite being a century-old luxury brand known for its driving performance, BMW seems to lack the expected competitive edge in today's Chinese automotive market. However, according to Zipse and the Group's Senior Vice President of Design, Hoydonk, the external pressures are not enough to shake BMW's brand foundation. Instead of chasing transient trends, BMW has been striving to identify and integrate its own classic elements into each generation of products, balancing tradition with innovation.
For designers, the challenge lies in making changes that users will embrace.
The highlight of the March 21st communication event was the unveiling of the new generation X Concept. According to the plan, this model will serve as the soul of BMW's next-generation SAVs (such as the X7 and X5 SUV models) in terms of exterior and interior design, guiding the design language of all future production vehicles.
In this new X Concept, BMW aims to emphasize the "unchanged" aspects more significantly than the changes. Of course, attention is still drawn to the changes, particularly in the exterior design. Compared to last year's sedan concept unveiled in Munich, the new X Concept adopts a similar design for the side marker lights and front hood. However, as the design flagship for SAVs, the new X Concept features a vertical illuminated kidney grille at the front, enriching the design language of the front fascia with distinctive elements.
At the same time, BMW has placed a large-sized aerodynamic package at the front lip of the vehicle. Unlike many all-electric cars that opt for a "sealed-off front face," BMW adopts this design partly to accommodate the intake needs of hybrid and combustion engine vehicles, and partly to give the whole vehicle a more powerful and aggressive appearance.
In other words, this car still needs to look unmistakably "BMW."
In terms of interior design, BMW has distilled its understanding of the new generation into two aspects: innovation and sustainability. Firstly, BMW replaces the dashboard with a "Panoramic Vision Bridge" and pairs it with an unprecedented large central control screen on the BMW brand, guiding the user's line of sight forward.
The display content of the panoramic view bridge can be customized by users, apart from speed and essential vehicle status. Meanwhile, the central control screen adopts a design reminiscent of the BMW "M Power" mirror, paying homage to classic elements while creating a slight tilt towards the driver's side to enhance focus and safety.
In terms of interior materials, BMW has incorporated a significant amount of materials in its concept car that are 100% natural, plant-based, or mineral-based and free from petroleum derivatives. For color choices, BMW's design team has opted for a combination of orange and white. These two colors appear fresh and soft under the sunlight passing through the large panoramic roof and windows.
Obviously, compared to the dazzling Mercedes next door with its bright ambient lights, or even BMW's own newly mass-produced 5 Series and 7 Series, BMW's design on its new generation concept cars is more restrained. Clearly, in the face of the comprehensive impact of electric vehicles on fuel cars and with traditional automotive groups actively or passively undergoing electrification transformation today, BMW is attempting to find breakthrough answers from its own long history.
And this answer lies in the BMW 1500. On the new generation X concept car, the slender kidney grille design is a tribute to this BMW's first model named "Die NEUE KLASSE" in its history. In fact, when promoting the new concept car internationally, BMW deliberately used German descriptions instead of the English "The New Class" for naming. All of this is done to pay homage to the classics and evoke people's initial memories of BMW's "luxury" and "sportiness" labels.
For most Chinese consumers, the BMW 1500 released in 1961 might just be an old car name. But for BMW, it's where they set the standard for their own four-door sports luxury sedan: independent suspension on all four wheels, disc brakes, a 50:50 weight distribution, excellent handling, and the iconic "Hofmeister kink" that continues to define BMW cars to this day.
The success of the BMW 1500 back then helped BMW establish its clear product positioning and corporate boundaries: producing only sports luxury cars. Even after acquiring Rolls-Royce and MINI, any car from the BMW Group is always labeled with a strong emphasis on driving performance.
From BMW's narrative logic, finding constants amid change and evoking the market's unique memories and identification with BMW through classic references is clearly the aim with the new-generation X concept car. However, from the perspective of this author, these efforts may encounter some "generation gap" for the Chinese people who only began widely embracing the automotive society after the 21st century.
After all, when the BMW 1500 debuted at the Munich Motor Show in 1961, the People's Republic of China had just turned 12 years old.
In 1961, Yuri Gagarin became the first human to journey into space.
More importantly, driven by the stringent demands for range in new energy vehicles, the next-generation X concept car, like many electric cars, adopts a design language that is more rounded and less angular, marking a significant departure from the previous generation of classic BMW models. However, this design deviation doesn't seem to be widely embraced by consumers in the market. The poor sales of the Mercedes EQ series electric cars serve as a testament to this notion.
The all-new BMW 5 Series boasts proportions that appear vastly different from its predecessors. However, Hoytonk emphasizes BMW's steadfastness on this matter: "Technological change is underway, and so should the design language take a leap forward," he told the author. "Our task is to guide users to embrace these changes and new technologies. As for how well it's done, time will tell."
According to BMW's plans, the production version of the new generation models will hit the market in 2025, with local production slated to commence at its factory in Shenyang, China, in 2026. Reportedly, the next-gen lineup will feature the sixth-generation BMW eDrive technology, boasting over a 20% increase in cell energy density, a 25% efficiency boost, a 30% increase in range, and an all-new 800V high-voltage platform.
In terms of intelligence, BMW's new vehicles will adopt a completely new electronic architecture, with powertrain and driving dynamics management software and hardware fully developed in-house, resulting in a tenfold increase in computing power compared to the past.
Behind this effort, BMW has established the largest and most comprehensive R&D network outside of Germany in China, aiming to provide support for the group's leading position in global markets. The Shanghai R&D center completed its upgrade in July last year, while the expansion project of the Shenyang R&D center Phase II was officially launched last year, strengthening BMW's capabilities in developing and validating localized new energy vehicles. This facility includes 19 new laboratories, with 17 dedicated to testing new energy vehicles. In December last year, BMW's vehicles equipped with Level 3 autonomous driving capabilities obtained public road testing licenses in Shanghai.
Evidently, in the eyes of the BMW Group, the company is sparing no effort to embrace the era of smart vehicles and will continue to be a key player in the luxury car market. However, BMW's sales performance in electric vehicles has not met external expectations.
Especially in the Chinese market, despite BMW launching three domestically produced models - the i3, iX3, and iX1 - and one imported model, the i7, last year, with combined sales exceeding 100,000 units and achieving a year-on-year growth rate of 138%, according to dealer quotation information from Bitauto, the terminal prices of the two main models, i3 and iX3, have already dropped by as much as 120,000 CNY and 130,000 CNY respectively compared to the suggested retail price, equivalent to a direct discount of 40%.
There seems to be a subtle indication of prioritizing volume over price.
Obviously, this is the result of the price war affecting the Chinese automobile market. In the price range where these two cars are positioned, there are already strong competitors such as Tesla Model 3 and Y, BYD's EV versions of Han and Tang, and others eyeing the market. Not to mention, this year we also have contenders like JiKe 001 and the Ideal L7 entering the fray.
However, in the face of these competitors, Zipser remained remarkably composed. He first pointed out that the price war primarily revolves around the market for cars priced below 300,000 CNY, "but this is just the entry-level price range for BMW products." In other words, BMW's stronghold lies in models priced above 300,000 CNY, regardless of the form of propulsion, and it has not been significantly affected.
More importantly, apart from the newly launched i5 and the i7 with a starting price of 940,000 CNY, BMW currently has not introduced more models priced above 300,000 CNY into the pure electric luxury car market. Therefore, it's premature to discuss market share in the segmented market.
The appearance of the all-new BMW 7 Series and i7 truly exudes dominance in a literal sense. Therefore, whether BMW electric cars can sell well and whether they can transfer the advantages of the era of combustion engine cars to the new energy vehicle era, we still need to wait for the market performance of the new generation models before making a final judgment.
However, BMW has not placed all its bets on the new generation models produced in China's market two years later. Zipse stated that by 2024, BMW will launch 11 electric vehicles in China, and within 24 months after the launch of the first new generation model in 2025, another 6 new models will be introduced.
But in this process, Zipse reiterated BMW's commitment and the delineation of its own model and capability boundaries: "We will provide long-wheelbase models like the locally produced 5 Series according to customer demand. But besides providing more interior space for users and ensuring a more comfortable ride, we also need to ensure that what we provide is a true BMW," said Zipse. "So, what does a true BMW represent? It means meeting customers' personalized needs forever, and it must be a dynamic and enjoyable driving experience."
In his view, business vans and MPVs do not belong to this category of products. Compared to venturing into unfamiliar areas in the new generation, BMW hopes to use its existing advantages in products and capabilities to serve its existing users well.
"BMW only has a 3.3% market share in the global automotive market. We don't need to serve everyone."
In conclusion:
With Chinese automotive brands leveraging the wave of new energy to replace joint venture brands, the voices of disparagement against joint venture automotive companies in China seem to be becoming mainstream in the industry in the past two years.
Of course, it is a fact that many joint venture brand new energy vehicles lack competitiveness in the current market. However, the author does not believe that Chinese automotive brands can be considered to have determined the overall situation based solely on gains and losses in a few years.
It should be noted that today's international automotive groups have a history spanning several decades, even over a hundred years. In their development process, they have experienced historical events such as world wars, Cold War confrontations, and the disintegration of the Soviet Union, which are enough to be recorded in the history of human civilization in the form of "chapters".
In 1961, the most significant event for Germany was the beginning of the construction of the Berlin Wall. The impact and consequences of these events on an automotive company were far more severe and profound than the wave of new energy vehicles.
In comparison, our young domestic brands have grown and flourished during one of the most peaceful and stable periods in human civilization. Therefore, Chinese automotive brands should demonstrate exceptional resilience in the face of these formidable challenges.
Especially for brands like BMW, originating from a country that faced defeat in two world wars, yet managed to rise from the rubble time and time again.
