Interview with BMW Germany boss Engel
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Mr. Engel, At the AMI Leipzig in early April you will be showing a world premiere ...
Engel: ... right, the BMW 5 Series Touring, which will go on sale on September 18th. For a car launched in September, a world premiere in April is pretty early. But we want to express our connection to the BMW plant in Leipzig and thus to the trade fair. It would be nice if the AMI could take place at the end of May or beginning of June in the future.
Which other dates are important for you this year?
Engel: The most important market launch was on March 20: the BMW 5 Series Sedan - our most important model this year. The model revisions of the BMW 3 Series Convertible and Coupé also started on this day. Our ActiveHybrid models will follow on April 17th: BMW Active Hybrid 7 and BMW ActiveHybrid X6. The revised BMW X5 is coming in June. And as I said, the 5 Series Touring and our Mini Countryman, the first four-door Mini, will follow on September 18.
So the most important model of the year is the 5 Series. How many units are you going to sell?
Engel: On the launch Saturday, the dealerships were full. The interest and enthusiasm remain high. We have never had such a well-attended trading launch before. With the new BMW 5 Series, we want to exceed the sales figures of the very successful predecessor.
What about the order backlog for the 5 Series? And how many vehicles have already been registered?
Engel: So much to say: We are already well above our originally assumed numbers with the orders.
Sales director Ian Robertson has already said that the sales figures of the predecessor of almost 160,000 units per year should be exceeded worldwide. How many of them are in Germany?
Engel: The new 5 Series will also sell extremely well in Germany. It's the best car in its class. This will also be shown by the sales figures.
In 2009 you were able to book 258,000 new registrations in Germany with the brands BMW and Mini and a market share of 6.8 percent. With that you were already 7.4 percent away from Mercedes. This year you are even closer to your arch rival as of February - with 7.9 instead of8.1 percent separate you just 1,000 new registrations from each other? Who will be ahead by the end of the year?
Engel: We want to grow in the single-digit percentage range in Germany - just as we do worldwide - and will thus continue to expand our segment and market share. We pay attention to profitable growth. With this in mind, it is of course our goal to become number one in Germany as well. And we do not want to and will not give up the position worldwide - neither in 2010, 2015 or 2020.
Will you pass the eight percent mark nationwide this year?
Engel: That has no relevance for us. But we will be above the 258,000 new registrations of the previous year.
What market development do you expect?
Engel: We expect a total market of around 2, 8 million new registrations - a decrease of one million compared to the previous year. Last year the market was artificially inflated by the car scrappage scheme. The weekly order reports from all manufacturers currently indicate an even worse value for the overall market in 2010. Our segment, the premium segment, should remain stable or even grow slightly. This year, too, it will be around 860,000 vehicles.
Will Germany remain the largest single market for BMW - and the most profitable?
Engel: Our common one The focus is on profitable growth. And if the BMW Group sells more cars in the US than in Germany, then that's good for us all. In 2009 we made the highest contribution margin overall. We want to further increase the contribution margin per vehicle. We are on the right track here.
That means you hold back on discounts.
Angel: The industry has to turn the discount spiral back again. Fueled by the scrappage bonus, the average discount level was too high and unhealthy last year. Our trade is consistently reducing the discounts - new models in particular help with this. Emotional and high-quality products will continue to be able to achieve a fair price on the market.
Daimler has launched the car sharing concept Car2Go for Smart. Will you soon be competing with landlords?
Engel: There are no decisions on this yet. We look at it and ask ourselves the fundamental question: What does the future of mobility look like and what does the customer expect in terms of flexibility. Cash purchases used to be common, now financing and leasing. In the future, customers will probably expect even more flexibility and may want to use different vehicles: a small car for driving into town, a larger car for driving into the mountains. The electric car can be useful for the city, and the efficient one for longer trips into the mountainsInternal combustion engine. That is why we are testing individual mobility behavior with our Mini E fleet in Berlin, Munich, London and the USA. The findings flow into our Project i, the Megacity Verhicle.
What's new from your sales network?
Engel: The average return on sales of our dealerships stood at 0.5 percent in 2009 despite the weak economy - better than all of our premium competitors. In 2008 we were still at 0.2 percent. The goal should be an average return of 1.5 percent. But we cannot prescribe returns. Ultimately, only the dealer can significantly influence his return through his performance. It depends on his performance and his efforts.
Were there bankruptcies in 2009?
Engel: Yes, seven. That is regrettable, but we feared a higher number due to the economic crisis.
What does your network structure look like now?
Engel: We have 620 full operations, i.e. sales and service locations, at BMW. There are also 132 pure service locations. With Mini there are 225 full and 218 service operations. These figures also include our 18 branches with 43 branches. From my point of view, the network structure is okay
Mini opens pop-up stores. Is that also a concept for BMW?
Engel: No, it will remain a mini concept. Because Mini is always different. We want to create an impulse for the customer here, to attract attention. But this is not a retail concept. At BMW, we are currently launching the 'Sales Light' concept independently of this.
What does it mean?
Engel: D amit we offer a solution for network coverage in structurally weaker areas where we want to continue to be present. Take areas in the east or northeast of the republic, for example. 'Sales Light' locations can be created there. At these locations, for example, there are fewer demonstration vehicles available compared to full operation. This and other measures reduce costs and continue to ensure network coverage.