Challenges for BMW in the Coming Years
If you are following the news about the automobile industry closely, you would have definitely read the articles about the effort BMW is putting forth in building an all-electric car. This is to ensure that the company can take on the challenge thrown to it by Tesla, which is currently ruling the roost in this segment. And now news coming in from Europe suggests that BMW may altogether give the Paris Auto show a miss to focus on its long-term plan of entering the electric car segment. BMW is at crossroad presently, as the new electric car it developed called i3 failed to get any traction in the market. The company could sell only 25,000 of this model this year.
It is learnt that several top executives of the company are unwilling to commit more resources towards development of new electric car models in the future. They are betting on more fuel efficient traditional cars that are the bread and butter of the company. However, with increased focus on environmental pollution, top planners at BMW are veering towards the view that it will be wise to enter the electric car market now. For this, the company is working on a two-pronged strategy to revive its flagging electric car business.
On the one hand, it is seriously looking at improving the performance of its existing i3 model. They are doing this by tweaking engine and transmission of the model to increase its mileage and power so that it appears more attractive. The second stage of the strategy is to build an all-new electric model named Mini that will come with new sophisticated design and a more powerful engine. However, there seems to be one glitch in this strategy. The new re-engineered Mini which is likely to be launched in 2019 is believed to have a price tag that will be significantly higher than its closest competitors. Therefore, to stay in the competition, the company has to pull some card out of its sleeves to keep the customer interested in the yet to be launched model when it arrives in the market.
In the meantime, to keep the profit ratio of the company at a higher margin, the company is planning to bring in newer models of petrol and diesel cars in the market. BMW is also focusing on the emerging markets like India that are high on potential.To exploit this untapped segment of the market even further, the company is also relying on used BMW models that are refurbished at BMW approved workshops and feature warranty from the company to entice more customers who are attracted by the lower price tag of such models. These cars look as good as new and as they are guaranteed by the company regarding their quality, it is safe to buy cars under this scheme to buy premium BMW cars at such reduced prices.