BMW CEO urges staff to narrow sales gap with Mercedes

[Miko M]

     Featured on BIMMERPOST.com

One of the first tasks from Oliver Zipse.

https://europe.autonews.com/automake...s-gap-mercedes

BMW CEO urges staff to narrow sales gap with Mercedes

FRANKFURT -- BMW's new CEO, Oliver Zipse, urged employees to embrace change and to find innovative ways to help the automaker overtake rival Mercedes-Benz at a time when demand for luxury cars is waning.

Zipse addressed staff in an internal email a day after his predecessor Harald Krueger stepped down.

BMW has lost ground to Mercedes-Benz producer Daimler in the past five years and seen rivals such as Tesla jump ahead in electric car sales.

"Instead of blaming the current situation, conditions, political landscape or particular individuals, a positive spirit will enable us to seize the opportunities available to us. Such a positive spirit will be reflected in our culture: the harder the job, the more innovative our solution," Zipse said.

"We don't always have to be first, but we most certainly have to be far better than our competitors in everything that we do. This applies not only to our products and services, but also to our processes and structures, as well as our costs," he said.

BMW has already narrowed the sales gap between BMW and Mercedes and is preparing to launch more models, Zipse said.

BMW's flexible production methods, which allow it to build electric and combustion-engined cars on the same production line, provide a major competitive advantage because it will allow the automaker to scale up or slow down production of electric cars in line with demand, Zipse said.

[alex2364]

Didn't BMW decide to prioritize profitability rather than sales volume? At least that is what they did with the US market.

[Dav3]

For BMW to gain more market share it needs to simplify and innovate it's line-up

Maybe they should also further develop their partnership with Toyota and attempt to absorb their hybrid engineering technology because clearly, their current electrical line-ups are both uninspiring and prototypical

Luxury cars for the working class hero is also another segment BMW should look into. Like the Corvette with the C8, BMW should make something more accessible to the market. Unfortunately this can only be profitable when done through economies of scale, so essentially BMW needs to trial and error a few new models before they can jumpstart the hype.

[Miko M]

Originally Posted by alex2364

Didn't BMW decide to prioritize profitability rather than sales volume? At least that is what they did with the US market.

Trying to hit 2 birds with one stone

Originally Posted by Dav3

For BMW to gain more market share it needs to simplify and innovate it's line-up

Maybe they should also further develop their partnership with Toyota and attempt to absorb their hybrid engineering technology because clearly, their current electrical line-ups are both uninspiring and prototypical

Luxury cars for the working class hero is also another segment BMW should look into. Like the Corvette with the C8, BMW should make something more accessible to the market. Unfortunately this can only be profitable when done through economies of scale, so essentially BMW needs to trial and error a few new models before they can jumpstart the hype.

For how old this industry is you would think they learned a thing or two.

We all know how this industry is changing and what direction is going

[xlover]

Originally Posted by alex2364

Didn't BMW decide to prioritize profitability rather than sales volume? At least that is what they did with the US market.

Their strategy in the US looks to be optimize per unit profitability and add more models to drive the incremental growth units...

3 significant moves i have observed:
1. Higher lease rates on traditionally subsidized models
2. Small incremental profit drivers: reduced after sale support (no more free wipers, etc) and silly things like subscription charges for carplay or potentially charging for other in car apps
3. more variety of models to choose from

I think only #2 is actually a risk to their business, there was no real reason to have the lowest lease rates of the german 3 other than pure unit movement goals, as long as they are competitive with the other two german brands they will not have an issue.
Additionally, Even with the traditionalist frustration in moves expanding the lineup farther away from core BMW historical competency (sport sedans), models like the gran coupes and expanded Xseries lineups have been driving growth.
The major consumer knock on lux cars overall is the "nickle and dime" optics. Packaging options seemed like a step in the right direction to improve that issue for the general market (again traditionalists love to pick and choose a la carte but that isn't a general market desire)... i think these subscriptions for things that are free on other brands is going to make it harder to market outside their existing consumer base. EG someone upgrading from ford or toyota is not going to want to pay for something free on their previous vehicle AND is free on the other lux brands they are cross shopping, small things like this leave an outsized bad impression on conquest opportunities

[alex2364]

Originally Posted by xlover

Their strategy in the US looks to be optimize per unit profitability and add more models to drive the incremental growth units...

3 significant moves i have observed:
1. Higher lease rates on traditionally subsidized models
2. Small incremental profit drivers: reduced after sale support (no more free wipers, etc) and silly things like subscription charges for carplay or potentially charging for other in car apps
3. more variety of models to choose from

I think only #2 is actually a risk to their business, there was no real reason to have the lowest lease rates of the german 3 other than pure unit movement goals, as long as they are competitive with the other two german brands they will not have an issue.
Additionally, Even with the traditionalist frustration in moves expanding the lineup farther away from core BMW historical competency (sport sedans), models like the gran coupes and expanded Xseries lineups have been driving growth.
The major consumer knock on lux cars overall is the "nickle and dime" optics. Packaging options seemed like a step in the right direction to improve that issue for the general market (again traditionalists love to pick and choose a la carte but that isn't a general market desire)... i think these subscriptions for things that are free on other brands is going to make it harder to market outside their existing consumer base. EG someone upgrading from ford or toyota is not going to want to pay for something free on their previous vehicle AND is free on the other lux brands they are cross shopping, small things like this leave an outsized bad impression on conquest opportunities

I mostly agree with this. These are the only things we can see from a consumer standpoint. I believe they have also cut back on dealer support within the past several years. I have seen a lot of long time BMW client advisors leaving within the past several years and if you read between the lines, they're just not getting paid like they used to.

A couple other things they have cut back on recently:

1. Euro delivery incentive
2. Maintenance reduction and no transfer
3. CPO warranty
3. Lease end buyout incentives
4. Demo lease incentives

[Miko M]

Originally Posted by alex2364

I mostly agree with this. These are the only things we can see from a consumer standpoint. I believe they have also cut back on dealer support within the past several years. I have seen a lot of long time BMW client advisors leaving within the past several years and if you read between the lines, they're just not getting paid like they used to.

A couple other things they have cut back on recently:

1. Euro delivery incentive
2. Maintenance reduction and no transfer
3. CPO warranty
3. Lease end buyout incentives
4. Demo lease incentives

I also heard it will be much harder to get Loyalty Incentive credit.
Don't have all the details but they try to cut anywhere to save.

[Darth One]

So he thinks that an impassioned speech by itself will turn the tide? Did he watch the Alec Baldwin scene from Glengarry Glen Ross and think, wow this is all we need! ��

He and his staff need to have a clear strategy, not statements of hopes and dreams. And a strategy that learns from the mistakes of his predecessor, right? Does he have a brand new strategy....?

BMW has already narrowed the sales gap between BMW and Mercedes and is preparing to launch more models, Zipse said.

Fuck.

[F32Fleet]

Next up, BMW announces that it will concentrate on trucks and sport utility vehicles while it expects continued modest growth in its ride sharing platform with Mercedes Benz.

[Miko M]

Originally Posted by Darth One

So he thinks that an impassioned speech by itself will turn the tide? Did he watch the Alec Baldwin scene from Glengarry Glen Ross and think, wow this is all we need! ��

He and his staff need to have a clear strategy, not statements of hopes and dreams. And a strategy that learns from the mistakes of his predecessor, right? Does he have a brand new strategy....?

Fuck.

I am sure the focus is on Electric now big time

Originally Posted by F32Fleet

Next up, BMW announces that it will concentrate on trucks and sport utility vehicles while it expects continued modest growth in its ride sharing platform with Mercedes Benz.

SAV is the one that drives the sale but, wait until economy slows down

[cfm56d7b]

After reading the article the day it was published, it's not clear what is meant by "sales gap".

Higher sales volumes in each category?

Higher profit per vehicle sold?

[Miko M]

Originally Posted by cfm56d7b

After reading the article the day it was published, it's not clear what is meant by "sales gap".

Higher sales volumes in each category?

Higher profit per vehicle sold?

Mine understating is that they want the crown of most sold vehicles.

[Timujin]

More cars than can unpark themselves. Done.

[M 4EVER]

Originally Posted by Miko M

For how old this industry is you would think they learned a thing or two.

We all know how this industry is changing and what direction is going

Will see how he dose and what the planes are. They all want to sell more cars.
Focus should be more on profit.
We all know that EV are taking over

[F32Fleet]

Originally Posted by Miko M

For how old this industry is you would think they learned a thing or two.

We all know how this industry is changing and what direction is going

BMW desperately trying to remain independent. Resisting the slow GM-ifcation via govt directed EV implementation along with changing consumer preferences.

The electric motor is essentially a commodity product so imagine a world where there are only 3-4 EV powertrain suppliers which sell to automakers worldwide.

These powertrain suppliers will come about via consolidation of automakers themselves or perhaps a joint venture. In the end consumer choice will be reduced to the equivalent of renting a self-driving golfcart with a different badge.

[Wivenhoe]

Well the strategy worked for me. I have just ordered my first BMW after previously buying 6 Mercedes from new. Their delivery time on an E300e was 8+ months, options all packaged up so you have to pay for options you don’t want or need to get those you want. Options such as HUD or massage seats no longer available. Restricted exterior and interior colours.

The dealer did his best to retain my business but accepted the product was just not competitive against the 530e - I got £ 10k discount which was about the same Mercedes would offer so they couldn’t even tempt with a better deal. The px offer on my E350e was the same at the BMW dealer as Merc offered.

[Miko M]

Originally Posted by Wivenhoe

Well the strategy worked for me. I have just ordered my first BMW after previously buying 6 Mercedes from new. Their delivery time on an E300e was 8+ months, options all packaged up so you have to pay for options you don’t want or need to get those you want. Options such as HUD or massage seats no longer available. Restricted exterior and interior colours.

The dealer did his best to retain my business but accepted the product was just not competitive against the 530e - I got £ 10k discount which was about the same Mercedes would offer so they couldn’t even tempt with a better deal. The px offer on my E350e was the same at the BMW dealer as Merc offered.

Sweet, welcome to the club

[M3_WC]

Originally Posted by alex2364

Didn't BMW decide to prioritize profitability rather than sales volume? At least that is what they did with the US market.

BMW prioritized a platform they would eventually abandon. They spent billions on r&d for the i-program. Only to abandon the i3 and i8 after one generation due to low sales. They will now build EV’s on their traditional platforms.

[SCOTT26]

Motivation is the key element to any successful business endeavour.
As I tell my team. " You come in, kick ass and go home and get paid for it."

[SteveinArizona]

Originally Posted by Wivenhoe

Well the strategy worked for me. I have just ordered my first BMW after previously buying 6 Mercedes from new. Their delivery time on an E300e was 8+ months, options all packaged up so you have to pay for options you don’t want or need to get those you want. Options such as HUD or massage seats no longer available. Restricted exterior and interior colours.

The dealer did his best to retain my business but accepted the product was just not competitive against the 530e - I got £ 10k discount which was about the same Mercedes would offer so they couldn’t even tempt with a better deal. The px offer on my E350e was the same at the BMW dealer as Merc offered.

When I bought my 530e (December 2017 delivery) the Merc wasn't even being sold in the US (I am not whether or not it is sold here now). But all the reviews had the 530e way better than the Merc version. So I think you made a good decision.

I love my HUD. I would not buy another car without one.

Welcome to the BMW PHEV crowd and enjoy it.

[Miko M]

Originally Posted by SCOTT26

Motivation is the key element to any successful business endeavour.
As I tell my team. " You come in, kick ass and go home and get paid for it."

Exactly, you can go home and feel good about what you accomplished.

The problem is the new millennials, they want things for granted. Generation X is so different!!!

[Darth One]

I worked in sales for a number of years. I agree that a motivated, capable sales force is key. But so is a compelling product. That second factor is what The Mentalist and his leadership team have to figure out better