BMW must play catch-up to Toyota

XYZZ submitted on 08/31/2007 Official AutoSpies Timestamp: 4:51 AM
from: www.gasgoo.com

[126] user comments | category: Spy News

Tags: BMW Hybrids Lexus Toyota 21st Century tech

BMW Hybrids Lexus Toyota 21st Century tech

"But the worry is that BMW is trapped in a 21st century Catch-22 -- how to make its high-performance cars more efficient and boost profits at the same time. Caught off guard by the rising popularity of Toyota (TM) and Lexus hybrid models, BMW is now trying to catch up with its own fuel-saving innovations tailored to combustion engines. Research and development spending rose 14% in the second quarter to $645 million. Installing the innovations across its entire model range is not cheap.

And so far consumers are not willing to pay a premium for a fuel-efficient BMW, analysts note. As a result, BMW's costs are going up, but the price of its cars do not recapture the investment in fuel-efficiency innovations. "Our first experience with [new technologies to boost efficiency] is that it gives us competitive advantage, but pricing remains a challenge," admits Krause. "Over time we will solve it."

Catching Up with Lexus' Hybrid

BMW Chief Executive Norbert Reithofer, who took control 11 months ago, is all too aware of the profit conundrum and has been huddling regularly with his top lieutenants on how to fuel earnings growth amid environmental challenges. During mini-retreats at a Bavarian lake called Tegernsee, an hour's drive from headquarters, the 51-year-old former production chief provokes intense debate on everything from engine technology to climate change. This fall Reithofer will present the results of the high-powered confabs: a 10-year strategic plan designed to boost profits and keep up the Bavarian automaker's growth trajectory.

That plan is likely to include a road map for future models that can compete with Toyota's hybrid juggernaut, cost-cutting measures to polish margins, and details on shifting more production to BMW's U.S. plant in Spartanburg, S.C., as a currency hedge. "The Lexus LS600 hybrid is a very sophisticated evolution of a hybrid. It caught BMW flat-footed. BMW will have to spend a lot to catch up," says Thomas Aney, analyst at Dresdner Kleinwort in Frankfurt.
Read Article

Comments:

Images hosted in your AgentSpace can now be posted in the comments section using the following syntax (case matters):
[img]IMAGE URL[/img]
Example: [img]http://agent004.myautospies.com/users/150/Sample-Gallery/sample1.JPG[/img]

BigShow50 - 8/31/2007 9:35:21 AM

+1 Boost

Lol...so for the German fanboys...yes you can say your euro rides are A-Number 1 in your world. And you can say all euro rides(MB, BMW, AUDI, etc...) are a global leader in the luxury segment and Lexus is not. But due to Toyota's juggernaut global profits, it looks to be that the German automotive profits falls back into the lap of Toyota/Lexus at the end of the day...

reply to this comment

david989 - 8/31/2007 12:47:22 PM

-8 Boost

German technology is horrible. Japanese technology has always been far superior.

Agent009 - 8/31/2007 2:07:43 PMView My AgentSpace

+8 Boost

You obviously don't get out much, now do you?

r_driver04 - 8/31/2007 5:33:52 PM

+2 Boost

All those profits and they still can't build a real driving machine. F1 is killing Toyota.

Threepoint1415926 - 9/2/2007 7:10:47 PM

+1 Boost

^^ Uh, BMW Sauber? If I knew how to count numbers, I'd say they're in 3rd place after running two years.

david999 - 8/31/2007 10:47:38 AM

-4 Boost

Wow, very telling comments indeed.

reply to this comment

MercBasher - 8/31/2007 11:00:00 AM

0 Boost

I don't understand BMW's problem - as an owner of a new BMW I don't care if all BMW's core technology is developed in-house or not. Frankly why doesn't BMW just buy the Toyota technology? It's only for one type of engine! In return BMW could probably sell to Toyota hundreds of thousands [millions] of diesel engines to boost Toyota products in Europe.

Where am I misguided on this issue?

reply to this comment

komododave - 9/3/2007 1:59:58 AM

+1 Boost

You're misguided because BMW already has a hybrid system. They combined forces with Mercedes and invested in GM's two mode hybrid system, which is designed for more powerful engines and rear wheel drive platforms like BWM and Mercedes use. Toyota's system is built for low horsepower and front wheel drive applications. The only reason BMW and Mercedes haven't used them yet is that they are contractually not allowed to yet. Since GM put up most of the cash for the system, GM gets to debut it first. It comes out later this year in the GMT-900s. Chrysler gets it next in the Durango.

Alec - 8/31/2007 11:59:08 AM

+5 Boost

I smell a Ban for him.

reply to this comment

Bmw8ter - 8/31/2007 11:08:49 AM

-4 Boost

I think Lexus will be the only luxury auto company that consumers are willing to take a chance with, for new fuel saving technology, for the next few years, atleast.

Just as Japan had to prove to the world they could make luxury cars, Europe now has to prove that they can produce and incorporate technology similar to Japan's offerings, with like reliability and consumer praise.

reply to this comment

david989 - 8/31/2007 12:46:38 PM

-12 Boost

Lexus stands for environmental friendliness already. None of the German brands do.

w209w114 - 8/31/2007 2:17:59 PMView My AgentSpace

+3 Boost

The Mercedes S-class is actually built more environmentally frindly and in consideration to the planet than a Toyota Prius. I dare you to look it up and be surprised and enlightened!

r_driver04 - 8/31/2007 5:30:22 PM

-1 Boost

Girls drive hybrids. Men drive internal combustion machines that breathe fire. The only car I want that runs on a battery is my model r/c car. And heck it only uses batteries in the radio because even it has a petrol motor.

r_driver04 - 8/31/2007 5:32:51 PM

+2 Boost

Most cars today are 80% recycleable. Unless it has one of those giant battery power cell hybrid setups. Then you just have to bury it at home out back with the dog. Stay green!!

EL34 - 8/31/2007 11:12:35 AM

0 Boost

I think it was the Germans that invented the hybrid automobile.

What has Japan invented?

reply to this comment

david999 - 8/31/2007 11:21:52 AM

-3 Boost

You are a fool.

Bmw8ter - 8/31/2007 11:46:28 AM

+5 Boost

What is your point? I never said Japan invented the hybrid auto, but it's pretty obvious who made it work best.

EL34 - 7/30/2007 1:08:01 PM-7 Boost
We all have to remember it wasn't Japan that invented the hybrid automobile.

So they don't own the rights to it.

- Germany can't win EVERYTHING; what is it with these diehard German fans not wanting to give the Japanese any credit when it's obvious they deserve it?

Alec - 8/31/2007 12:07:31 PM

+4 Boost

Marketing played off big for Toyota's Hybrid. Of course not in Europe since all the Diesels are sold. I agree it is from a US point of view. But the US isnt realy major in diesel cars. Toyota, Honda, Nissan are all marketing small cars. BMW has small cars, except they're just sporty and not fuel effiecient. The US right now is the cash cow for any maker with small fuel effiecient vehicles due to the rising gas prices. Toyota so far has been doing best at it. If BMW wanted to rival TOYOTA not Lexus, small entry level cars will have to be made (no steep price tag of 30grand for a car the size of a Yaris).

reply to this comment

r_driver04 - 8/31/2007 5:39:34 PM

+3 Boost

No...I think that title goes to you driving the Chevy Cavalier with a Folgers Coffee can as an exhaust pipe. It looks good though.

reply to this comment

Will_ - 8/31/2007 1:05:39 PM

+12 Boost

LEXUS doesn't rival BMW in this regard. LEXUS doesn't have cars like the 128d. Hybrid technology isn't going anywhere. Hybrids have proven themselves to be fuel efficient in many aspects, mainly in urban environments but it's not as if they totally lose all efficiency outside those environments. In the infamous German comparison test between the GS450h, E-Class Bluetec and 5-Series diesel, the GS450h tied with the E-Class in highway mpg, all the while beasting them in city driving. It did all that while getting better emissions and having an incredible lead in power/performance. Of course the Lexus lost in the comparison for reasons still unknown to me, but that in itself is noteworthy.

North Americans wont warm up to diesels A) because they cant even be sold in many States due to emissions regulations. The problem for the Euros is that most Americans have been educated enough on the issue to know that good fuel economy is not everything, for EMISSIONS are equally important in a fuel-efficient car. The Euros have to keep going back to the drawing board, drafting up new filters and additives to reduce emissions to acceptable levels. I think they're finally realizing that it's probably more financially sound to just offer hybrids which offer a better balance between mpg and CO2.

It's really no debate that credit must be given to Toyota for making hybrids financially viable and available to the masses. Yes Honda created a modern hybrid first, but as with all new wave products it takes a more appealing package and the right marketing to fully push that product, all of which many here fault Toyota for all the time unjustly. We should at least thank Toyota for getting many North Americans at least interested in fuel economy and emissions. Toyota did all the hard work, now all other automakers have to do is push their products.

reply to this comment

Rupert - 9/1/2007 5:05:07 PMView My AgentSpace

-1 Boost

Will, diesels actually fair very well on CO2 emissions, better than petrols and often equal to hybrids.

All BMW 5 series diesels have better (lower) CO2 emissions than a GS450h, for example.

And with regards to the "hybrids being financially viably" bit, while the Camry, Highlander, RX etc hybrids are profit-makers, the Prius is still a loss-maker, and Toyota loses money on every single one sold, but subsidizes it from the sales of its other hybrids.

Anthony - 9/1/2007 10:20:02 PM

0 Boost

None of the BMW 5-Series diesels are as fast as the GS450h though.

ICON - 8/31/2007 1:31:12 PM

+2 Boost

"BMW must play catch up to Toyota" - on a cost basis that is going to be difficult to do because Toyota/Lexus spread their costs over a wide range of vehicles. Sharing parts and economies of scale between Lexus and Toyota gives them a distinct cost advantage. But you have to realize what you are buying.

The new 128d is purported to get much better mileage than the Prius...so we will see how it all shakes out.

reply to this comment

Alec - 8/31/2007 1:43:52 PM

+3 Boost

As interperated, this is or might be a American written article. So diesels may very well not make it stateside.

Lexus - 8/31/2007 2:22:31 PM

-1 Boost

BMW is playing catch up with Lexus that are you German fanboy need to read, :) LOL............Lexus is taking over baby...he...he...he....

reply to this comment

Bmw8ter - 8/31/2007 3:58:48 PM

+2 Boost

How you going to call someone an idiot and then say -

"And if the German brands become extinct, Lexus has nobody to copy from!"

pull your head out of your a**.

1evlaudi - 8/31/2007 4:04:47 PMView My AgentSpace

-1 Boost

I am almost speechless...
the amount of childdishness expressed by Lexus, ricemaster, david989.
Guys! how old are you, what are you doing here, what are you trying to prove or achieve? Have you been kicked out of the debate team when you were, or still are, in school?
I am baffled by the ignorance of your comments. Do you just like to type misconceptions, lies, propanganda and such, just to have the peasure to be able to read yourself on the internet.
I might not agree completely with the article above but it has some good valid points.
will and carwimmer have made good valid points too, therefore I value their opinion and see them as true knowledgeable car enthusiasts.
You guys, "Lexus fan boys" are bafoons. You can be funny to a point but mostly you are annoying.

reply to this comment

1evlaudi - 8/31/2007 4:08:55 PMView My AgentSpace

+1 Boost

thank you sport, nice finds

reply to this comment

1evlaudi - 8/31/2007 4:37:05 PMView My AgentSpace

-1 Boost

well said caltrans, could not agree more

reply to this comment

1evlaudi - 8/31/2007 4:48:54 PMView My AgentSpace

-1 Boost

from EGMcartech test drive of the A5, to solidify Caltrans post:
"Audi’s interior designers must be descendants of fine watchmakers: They share an obsession for extreme precision and detail. Little touches like rubberized vent controls, satin-finished engine start button and knurled aluminum on the Multi Media Interface (MMI) control knob exemplify this engineering mentality."

reply to this comment

Lexus - 9/1/2007 12:48:43 AM

+2 Boost

Give me a break, people in the U.S. buy Japanese cars in general because it more realible than German brands.

It is a proven fact that Japanese automobiles are far more realible, better fuel efficiency, and quality. And provide their customer with an overall better package than the German brands for their $$$.

reply to this comment

Htay7500 - 9/1/2007 9:26:28 AM

+2 Boost

and VW is reliable?

(sarcasm intended)

S4cabriofoxone - 9/1/2007 2:35:27 PMView My AgentSpace

+1 Boost

But I don't know if this study is correct. According to all other JD Power and CR studies, Audi is ahead of both BMW and Mercedes-Benz. Suzuki has never been that far down, either.

Htay7500 - 9/1/2007 4:05:39 PM

+1 Boost

don't mind if I throw this in:
http://www.truedelta.com/results0607.php

XYZZ - 9/1/2007 5:38:54 AM

+2 Boost

the germans also lag in production engineering.

the "just in time" or Lean Production system pioneered by toyota, is the "secret weapon" that ultimately led to their success. it enabled world beating quality of assembly, at basically NO COST. part of detroit's comeback in quality was due to their picking up the lean production system, having seen it at their joint venture with toyota at fremont, california.

the euros were SLOW even adapting to mass production, from the earlier "craft" style production system. only when dragged kicking and screaming to the new system by GM (at their new Opel plant) did europeans finally see the advantages toyota long possessed. when they finally COPY the toyota production system and enter the 21st century in PRODUCTION ENGINEERING maybe their quality and reliability will catch up to that of toyota. to say nothing of lexus.

(and they will still need to get RELIABLE ELECTRONICS, which the japanese mastered long ago.)

reply to this comment

Htay7500 - 9/1/2007 7:44:13 AM

+1 Boost

" BMW sells a lot of fuel efficient cars in all markets EXCEPT the United States. If you go to Australia, The Middle East, Japan and various other Asian or African countries, you'll find consumers have the choice to purchase BMW cars like the 320i or 520i or in some cases the 320d / 520d / 525d being offered in these markets. These cars are particularly fuel efficient and are far from slow either." that would be nice if they offered a 320/520i w/ AWD. but thats not gonna happen here, sadly. the USDM market always comes last to get the better offerings found in the rest of the world.

reply to this comment

S4cabriofoxone - 9/1/2007 2:38:41 PMView My AgentSpace

-1 Boost

It's more about product placement- BMW does not want to cheapen its US image with models like the 520i, which would be seen as severely underpowered. A 35mpg 530d would fare much better.

S4cabriofoxone - 9/1/2007 2:40:36 PMView My AgentSpace

-1 Boost

I just think BMW and Audi should bring more diesel models here, such as:

330d, 335d

530d, 535d

740d

X5 3.0d

A4 3.0TDI

A5 3.0TDI

A6 3.0TDI

Q7 3.0TDI

A8 4.2TDI

I could go on... but all of these cars would do very well here- they're more efficient and just as fast as their gasoline counterparts (in some cases, faster), so why not?

reply to this comment

Htay7500 - 9/1/2007 4:22:41 PM

+1 Boost

I hope none of those diesels f-around with my asthma.

remember these diesels will have a hard time getting around US emissions regulations until they create something like bluetech. I remember this yrs DC auto show in the audi exhibit where they were displaying a "concept" audi q7 3.0 bluetec diesel swb ( I think) from germany. It was in black and looked very nice. too bad I couldnt get a pic. asked one of the guys if it comes to the US.

me: when will this come to the US?
him: maybe in a few yrs, this is just a concept from germany.
me: oic. looks nice. so I guess audi & MB are teaming up creating diesel for the USDM?
him: yep. its gonna them a while to get this available to the US since emissions regulations are hard to get around through. so were teaming up for that matter.

thats what I remember.

Rupert - 9/1/2007 5:06:34 PMView My AgentSpace

0 Boost

S4, wait for the next gen 735d, it will surpass the 740d in everything.

Rupert - 9/1/2007 8:39:07 PMView My AgentSpace

+2 Boost

I'm going to address a few diesel issues.
1) Smell

Diesels no longer smell, older ones do, they smell horrible.

2) Soot
Only under hard acceleration are you likely to see a cloud of soot, and it will only last for a second.

3)Refinement
Diesels are now very much more refined, and while one can often tell it is a diesel, they do not clatter as they used to.

4) Torque
Diesels have huge amounts of torque, enabling quick out-of-corner punch and good overtaking power. Diesels carry heavy loads comfortably, without the need for high revs.

5) Diesels have equivalent if not better mileage than similar hybrids.
On highways they excel.

reply to this comment

Anthony - 9/1/2007 10:22:14 PM

+2 Boost

Hybrids can achieve all of those points as well. No smell, no soot, refined, instant torque and great mileage where they happen to excel in cities.

Lordvader - 9/2/2007 2:57:28 AM

+3 Boost

In response to the article:

Uhh...Ya think!!!!? Toyota is involved in something very significant, as are all the auto manufacturers, however, Toyota is spear-heading the assault, and they have captured the American market in their campaign. We are in the beginning stages of a paradigm shift. That shift is away from fossil fuels. Power and performance will always have its' place (I absolutely love the two), but it will become a niche. The mass market wants reliability, value, efficiency, and a minimal environmental footprint. The numbers don't lie. Enough said.

reply to this comment

Lordvader - 9/2/2007 3:03:29 AM

+3 Boost

Quick comment on diesels...

They will not get footing in the US! It's a great thing in Europe, but they have the infrastructure for it. Their pumps and system run on a low sulfur mixture. We do not have that here in the US, and it will not happen, simply because those with the money, will not invest to convert our infrastructure. In short, EU diesel is not the same as US diesel. Not going to happen. Again remember, the shift is away from fossil fuels, not from one fossil fuel type to another.

reply to this comment

XYZZ - 9/2/2007 3:50:30 AM

+4 Boost

...

reply to this comment

XYZZ - 9/2/2007 3:59:00 AM

+2 Boost

with regard to RELIABILITY, bmw (and ALL euro brands) must still play catch up to TOYOTA.

LEXUS is in a completely different league altogether.

reply to this comment

huu76 - 9/2/2007 4:53:59 AM

+1 Boost

Sport,
Nitrogen and Oxygen are both colourless gases. Why did they only hold it there for 10 seconds?

Ask them to inhale for about 10 seconds when the car's idling. You'll be surprised that you can do that with a full hybrid.

reply to this comment

Kinger - 9/3/2007 6:15:25 AM

0 Boost

It is BMW's own team you schmuck, they now own Sauber.

http://en.wikipedia.org/wiki/BMW_Sauber

reply to this comment

enthusiastx11 - 9/2/2007 10:33:01 PM

-1 Boost

you can't really compare apples and oranges.

toyotas/lexus are comfortable luxury cars. handling and performance are generally mediocre. bmw's are performance first, luxury second.

reply to this comment

Agent001 - 9/3/2007 11:33:00 PMView My AgentSpace

+1 Boost

no profanity is allowed in postings

001

reply to this comment

XYZZ - 9/7/2007 4:56:41 AM

+1 Boost

well, if anything can be said FOR diesels, they apparently have been SLOWING GLOBAL WARMING.

or, another way of putting in, they have helped MASK the seriousness of the problem.

aerosols, particulates, and other air pollutants have lessened the amount of solar energy reaching Earth's surface, even as the average global temperature has been rising, according to the recent PBS program on "The Dimming Sun."

reply to this comment

XYZZ - 9/7/2007 5:06:16 AM

+1 Boost

so we all are trapped in a 21st century Catch-22.

we DO NEED to reduce co2 emissions and pollution generally. but as we clean up the air, more solar radiation gets down to us, increasing the greenhouse effect and feedback cycles even more.

keeping co2 emission at current levels WILL NOT BE ENOUGH. we need to REDUCE them to 1970s levels or lower.

otherwise, say goodbye to ALL the planet's coastal cities over the next half century, if not sooner.

reply to this comment

To post a comment for this story, you must first Login.

If you do not have an account, you will need to Register (It's Free!).