• BMW looking to cut major costs in an effort save over $5 billion and increase profitability - Will quality suffer?

      BMW is a business, not a shocker. They are in business to make money. Make money they do as they keep pumping volume and increasing the available models so they can get as many sales as the market can handle. Some would argue BMW has already diluted the lineup to the point their image has taken a hit. BMW would argue that sales figures equal success and that is the current philosophy of the company. Sales, sales, sales, and more sales.

      BMW's CEO Robert Reithofer hired consultants to draw up plans to cut five billion dollars in annual expenses. That is a big chunk of cash and where exactly is it going to come from? They want to cut costs while expanding the lineup? The 'i' brand, the BMW X7, the 2-Series Active Tourer, and there is much more on the way. Something is going to have be cut and something will give, but what?

      They want to sell more cars and keep profitability high while cutting costs. BMW already stated they will not be making any bespoke M motors and basing all engines on those already in production so that is gone. BMW stated they will not produce a new M1 or M version of the i8 so that is gone. They have also diluted the brand by putting the M badge on everything to get extra money. Keep profits high, who cares right?

      It seems the cuts and choices are all affecting enthusiasts but not the bottom line. BMW is simply chasing profit above all else. Chasing it to a level that means the quality of the products suffers and enthusiast choices in the lineup suffer. BMW is basing their decisions on profit targets and not on quality, "Generally speaking we are continually watching our costs, and seek to maintain and enhance our international competitiveness. We seek to achieve a sustainable EBIT margin of between 8 and 10 percent, our strategy is based on this profit target."

      A BMW i8 M or new M1 will not provide the EBIT margin BMW is looking for. It would provide BMW fans with the best M car in decades though. But who cares? Profit targets between 8 and 10 percent are more important than the Ultimate Driving Machine. Gentlemen, BMW died a while ago. Say hello to the Ultimate Profit Machine era.


      This article was originally published in forum thread: BMW to Cut R&D, Other Costs in Effort to Save 4B Annually started by richpike View original post
      Comments 5 Comments
      1. BigM62's Avatar
        BigM62 -
        BMW now means Bavarian Money Works
      1. deemo319's Avatar
        deemo319 -
        They are bringing out M1 for the 100 year anniversary in 2016. That was why they did M1 Homage three years ago. To get us fans ready, and to gauge the public reaction.

        But they are planning to save some serious coin with their ambitious cost cutting plans though.
      1. Sticky2's Avatar
        Sticky2 -
        Let's hope they do but this news still doesn't bode well for enthusiasts. More cost cutting, more platform sharing.
      1. Cmann's Avatar
        Cmann -
        Ultimately I don't think the end user will suffer too much at the hands of these changes. It will be a different story for BMW employees though. Such a shame that there's people all around the world willing to work for much less than Westerners.
      1. Sticky's Avatar
        Sticky -
        Click here to enlarge Originally Posted by Cmann Click here to enlarge
        Ultimately I don't think the end user will suffer too much at the hands of these changes
        We already are suffering.