BMW AG

BMW AG Bayerische Motoren Werke AG Sheer Driving Pleasure

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BMW Roundel (Logo) 

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The logo was initially a horse (rappe in German) encircled by a star-spangled banner with the name Rapp Motor on it.

It was later changed to look like that of an aircraft propeller in motion, and colored with the Bavarian Region’s flag, with the old encircled image changed to simply read BMW.

BMW: WW I Before/After 

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Initially founded as Rapp Motorwerke GmbH, on 28 October, 1913; by Karl Rapp and Julius Auspitzer with intention to sell engines of all types- cars and aircrafts, with expertise in aircraft engines.

Name changed to BMW AG on 21 July, 1917 as part of a major restructuring project.

Merged with Bayerische Flugzeugwerke AG (BFW), in May 1922 aircraft production company founded

by Gustav Otto, son of Nikolaus Otto, inventor of the first efficient four stroke engine (which was developed by Karl Benz in 1878).

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Developed military aircraft and engines during WW I and II. In 1926 aircraft manufacturing division renamed to Messerschmitt after Willy Messerschmitt who designed the aircraft that played an instrumental role in WW II, as one of the deadliest aircraft to soar the skies.

After WW I (1914-1918), Treaty of Versailles banned German production of all heavy engineering goods, forcing many industries to shut down or look at different avenues for business.

BMW: Post-WW I Crisis 

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Conditions of treaty forced BMW to hand over or destroy all aviation related technologies (the most advanced of their time).

As of 18 June 1919 BMW AG began production of powerful pneumatic brake assemblies for trains, under license from the Berlin-based company KnorrBremse AG, who were looking for a big factory with capable workforce to cope up with demands for the next 10 years.

In 1920, BMW was bought by Knorr-Bremse AG, but was allowed to keep it’s name.

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Considerable growth under new ownership during 1918-1921, until bought by Camilio Castiglioni again on 20 May 1922, who sold BMW to KnorrBremse AG in the first place.

Bought back the “insignificant” engine-building division and aluminum foundry along with the BMW name and trademark.

Only engine division and trademark logo owned by Castiglioni. Original BMW remained with Knorr-Bremse AG, which was renamed Südbremse AG as it could no longer use the BMW trademark.

BMW HERE TO STAY… 

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New headquarters for Bayerische Motoren Werke moved into the very same buildings of Gustav Otto's former Otto-Flugzeugwerke, and it is precisely here, on Lerchenauer Strasse 76, that BMW has maintained its roots ever since. BFW was now renamed BMW and, with some 200 workers housed in old wooden sheds, it began production on a modest scale.

Initially its output was BFW motorcycles, replacement engines and spare parts for aero-engines.

Not very successful until it clinched deals to supply Eastern Europe with armaments.

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Permitted Czechoslovakia to manufacture BMW IIIa and BMW IV aero-engines under license.

Most profitable and prosperous business collaboration was with Soviet Union in 1920s until 1931.

BMW began building motorcycle engines and then motorcycles.

Its motorcycle division is now known as BMW Motorrad. Their first successful motorcycle, after the failed Helios and Flink, was the "R32" in 1923.

BMW: AUTOMOTIVES

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(From left to right): Karl Rapp (founder Rapp Motor Works), Camilio Castiglioni (Financier and part owner), Gustav Otto (Aircraft and Mechanical Engineer), Franz Josef Popp (General Director from Inception to1942) and Max Friz (Chief Designer / Engineer)

BMW 3715 

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Around 1925 two specially hired BMW designers, Max Friz and Gotthilf Dürrwächter, both former employees of Daimler-Benz in Stuttgart, were commissioned by BMW’s Managing Director Franz Josef Popp to design a BMW production car.

From this first, demonstrably operational BMW car – though as yet lacking any bodywork, BMW laid the groundwork for one of the world's most respected manufacturer of automobiles.

Success for BMW in this industry came from an already proven source-the Seven.

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In 1927 the tiny Dixi, an Austin Seven produced under license, began production in Eisenach (Eastern Germany). BMW bought the Dixi Company the following year, and this became the company's first car, the BMW 3/15.

First Indigenous Car… 

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As the license for “Dixi” would expire in 1932, BMW attempted many different car designs which all had flaws.

Enter German engineer, Josef Ganz, engineering father of Volkswagen Beetle, the most popular and successful motorcar till date.

Consultant Designer with BMW, gave the BMW AM1 introduced in the first half of 1932 and quickly became a great success.

WW II: Calm Before the Storm 

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WW II forced major German Industries to refocus attention to production of armaments for the Nazi Regime.

BMW AG now followed directives issued by the Regime, which until now was run by Franz Josef Popp autocratically.

Resumed production of aeroengines, taking heavy toll on other subsidiary production branches.

Civilian motorcycle production halted by 1940. In 1942, production plant shifted to Eisenach from Munich, to increase engine production.

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Short time later in 1942, motorcycle production abandoned altogether.

Over 30,000 different aero engines were manufactured up to 1945 for the Luftwaffe including the most powerful BMW 801.

BMW also researched jet engines, producing the BMW 003, and rocket-based weapons.

BMW AG had to give up automobile manufacturing with effect from 1940, as the company wasn’t producing any cars for the army. Only repairs were carried out, some engines manufactured and a development department was maintained.

WW II: Restructuring and Slave Labor 

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On October 1, 1940 all BMW subsidiary companies were ordered to pass all profits to the parent company.

Production of heavy machinery divided into four assemblies working independently of each other in Munich, Eisenach, Allach and Berlin, answerable only to the BMW Directors and the Regime.

By January 1, 1944 all sales were effected via BMW sales, which was subject to several cash injections to keep up with the demands of war.

Foreigners were also employed from mid-1941, to make up for the lack of workers to maintain production.

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Foreigners were used at all sites and by 1944, making up between 40% and 50% of the workforce at BMW, which numbered over 50,000 at the time. The legal status of foreign workers ranged from prisoners of war to forced labor.

BMW used forced slave labor primarily from concentration camps between 1941 and 1945.

At the end of the war, the plants of BMW AG were confiscated by Allied troops.

The production of armaments at the company was of course brought to an end.

WW II: Aftermath – 2nd Crisis 

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BMW AG was heavily bombed towards the end of the war, reducing most of the companies production facilities to rubble.

At the end of the war, the Munich plant was completely destroyed. Of its sites, those in eastern Germany (EisenachDürrerhof, Wandlitz-Basdorf and Zühlsdorf) were seized by the Soviets.

BMW was banned from manufacturing for three years by the Allies and did not produce a motorcycle, the R24, until 1948, and a car model until 1952.

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During the three year ban BMW used scraps and what resources they had available to manufacture bicycles and kitchen supplies.

In the east, the factory at Eisenach was taken over by the Soviet Awtowelo group which formed finally the Eisenacher Motor-Werke. That company offered "BMWs" for sale until 1951, when the Bavarian company prevented use of the trademarks: the name, the logo and the "double-kidney" radiator grille.

The cars and motorcycles were then branded EMW (Eisenacher Motoren-Werke), production continuing until 1955.

Financially Crippled 

EMW also copied the original BMW logo but changed the color scheme from blue to red.

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In 1948 BMW produced its first postwar motorcycle and in 1952 its first passenger car.

However, its car models were not commercially successful; as they were too expensive to build profitably and were low volume like the acclaimed BMW 507 and 503.

By the late 1950s, it was also making bubble-cars such as the Isetta.

Isetta

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The acclaimed ------------------ 1956 BMW 507

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1954 BMW 502------------------- V8 Super

Square One 

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Most of BMW's brightest engineers were taken to the US and the Soviet Union to continue their work on jet engines which BMW produced during the war.

The BMW 003 was an early axial-flow turbojet engine produced by BMW AG in Germany during World War II. It and the Junkers Jumo 004 were the only German turbojet engines to reach production during World War II. The engine also formed the basis for turbojet development in Japan during the war, and following the war was produced in the Soviet Union and France.

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BMW-003s powered the prototype of the first Soviet jet, the Mikoyan-Gurevich MiG-9.

By 1959 the automotive division of BMW was in financial difficulties and a shareholders meeting was held to decide whether to go into liquidation or find a way to carry on. It was decided to carry on and try to cash in on the current economy car boom enjoyed by some of Germany's ex-aircraft manufacturers such as Messerschmitt and Heinkel.

Thus the rights to manufacture the tiny Italian Iso Isetta were bought using a modified form of BMW's own motorcycle engine. This was moderately successful and helped the company get back on its feet.

Third Crisis: For Sale 

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In 1959 BMW's management suggested selling the whole concern to Daimler-Benz. Major shareholder, Herbert Quandt was close to agreeing such a deal, but changed his mind at the last minute because of opposition from the workforce and trade unions and advice from the board chairman, Kurt Golda.

Instead Quandt increased his share in BMW to 50% against the advice of his bankers, and he was instrumental in turning the company around.

That same year, BMW launched the 700, a small car with an air-cooled, rear-mounted 697 cc engine from the R67 motorcycle.

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Its bodywork was designed by Giovanni Michelotti and the 2+2 model had a sporty look.

There was also a more powerful RS model for racing.

Competition successes in the 700 began to secure BMW's reputation for sports sedans.

Stability and Growth 

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BMW 700 (1959–1965) stabilized the company’s future and prevented being taken over

by Daimler-Benz (1961) and promptly began producing sedans from then on.

BMW returned to make small cars in 2001with the famous “MINI” brand.

The 700 was succeeded by BMW 1500 sedan referred to as the “New Class”, which developed into 1600 and 1800 models (1966).

Variants of these models would later become the BMW 3 series, the highest selling BMW line till date.

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Reaching production cap in 1966, BMW bought Hans Glas GmbH and its factories at Dingolfing and Landshut, restructured them, former of which would become the largest factory.

In 1968, Eberhard von Kuenheim from Daimler-Benz AG presided over the company's transformation from a national firm with a European-focused reputation into a global brand with international prestige.

From 1970 to 1993, under von Kuenheim, turnover increased 18-fold, car production quadrupled and motorcycle production tripled.

BMW: 1993 Onwards 

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After Von Kuenheim joined BMW AG several models of Coupes and Sedans were introduced to the market as per demands.

After retirement of Von Kuenheim, leadership went to Bernd Pischetsrieder, expanded the company to include: Rover (MG) Mini Land Rover

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While BMW cars were doing exceptionally well, the ROVER brand failed to sell.

MINI on the other hand turned out to be an excellent venture, which till today remains as the best-selling car acquired by BMW AG. In 2000, ROVER CARS was sold to Phoenix Consortium which was called MG ROVER .

LAND ROVER division sold to Ford.

ROVER TROUBLES 

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When BMW sold ROVER CARS production facility to Phoenix Consortium, they had to give approx. £500m to Phoenix as assurance that ROVER will not go bankrupt for at least 3 years after sale.

Meanwhile LAND ROVER was sold to Ford. In both transactions the Brand Name ROVER was owned by BMW, not Ford or Phoenix.

MG ROVER went bankrupt in 2005 and so BMW sold entire ROVER COMPANY holdings to Ford including Trademarks.

--------------------MG Rover, after------------------the luxury car -------------------division of ROVER ---------------COMPANY was ------------------sold to Phoenix.

-------------LAND ROVER, the SUV----------division of ROVER --------------COMPANY. --------------ROVER CARS (L) and---------------------- original --------------------------ROVER ---------------------------COMPA NY (r)

Production Facilities 

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MG ROVER (Rover car division owned by Phoenix) and all other ROVER related subsidiaries was sold in whole, with trademarks, by BMW to FORD, who later sold it to Chinese Nanjing Automobile.

Land Rover (4WD division) however made it’s way to TATA MOTORS in 2008 along with Jaguar.

Increasing demand in domestic and overseas market meant more production lines.

Various production plants set up in Europe, Africa, North/South America and Asia with more in the works.

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BMW's Rosslyn, South Africa, plant was the first BMW assembly line established outside Germany, with production starting in 1973.

The wholly-owned subsidiary now exports over 70% of its output. The plant now exports over 50,000 3 Series cars a year, mostly to the USA, Japan , Australia, Africa and the Middle East.

BMW started producing automobiles at its Spartanburg, South Carolina, plant in 1994. Today, the plant manufactures the BMW X5 and the BMW X6. The production of the BMW X3 will be moving to Spartanburg from Europe after the completion of a major expansion of the U.S. facility.

Production Facilities Cont… 

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The Spartanburg plant is open six days a week, producing automobiles approximately 110 hours a week. It employs about 4,700 people and manufactures over 600 vehicles daily. Both the X5 and the X6 are produced in the same line, one right after the other.

Outside Germany, the largest output of the BMW Group comes from British factories.

The Hams Hall plant manufactures four cylinder BMW engines for use around the world in 3-Series, 1-Series and Z4 vehicles. This is in addition to MINIs and RollsRoyces made in Oxford and Goodwood.

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BMW signed agreement in 1999 with Avtotor to produce cars in Kaliningrad, Russia. Factory has been assembling 3 and 5 -series cars.

Starting from October 2004, BMWs intended for the Chinese market are produced in Shenyang, China. Joint venture with Chinese manufacturer Brilliance to build BMW 3 Series and 5 Series that have been modified for the needs of local markets.

Production Facilities Cont… 

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The BMW X3 was manufactured in Graz, Austria between 2004 and 2007 by Magna Steyr with mainly German components.

The X3 production will be moved to the Spartanburg plant due in part to high production and transportation costs of what was meant to be the "more affordable" SUV. North American pricing, after said costs, were nearly on par with the larger, American-built X5.

In 2005, BMW Group built a new manufacturing facility in Egypt. This plant builds 3 Series, 5 Series, 7 Series, and X3 vehicles for the African and Middle East markets.

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BMW opened its first assembly plant in Chennai, India in March 2007 to assemble 3-series and 5-series vehicles. The 20 Million Euro plant aims to produce 1,700 cars per year in the medium term, though this could rise to up to 10,000 cars if demand grows. The new factory may also be used to help boost the production of BMW’s super-successful MINI. BMW India headquarters is located in Gurgaon.

Production Facilities & Motorsports 

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The BMW Group is considering the establishment of a new plant which will be located either in Volos, Greece or Limassol, Cyprus. These plants will manufacture motorcycles as well as the BMW 1series and BMW 3 Series and will be serving the markets of Eastern Europe and West Asia.

Construction is rumored to begin in 2009.

BMW has been engaged in motorsport activities since the dawn of the first BMW motorcycle.

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Formula car Formula One - BMW has won 19 Grands Prix as an engine supplier. BMW won its first race as a constructor on 8 June 2008 at the Grand Prix of Canada with Robert Kubica driving.

In July 2009, BMW announced that it would withdraw from Formula One at the end of the 2009 season, due to unfavorable financial conditions. It will remain involved with Formula One in other aspects.

Motorsports Pullout 

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It followed other auto-makers Honda, Toyota and Renault who also quit the competition in the last two years because of the effects of the economic downturn on car sales.

However the governing body of Formula 1, the FIA, has assured that BMW gets all the assistance it requires from the council and all the teams involved in the races, as per a joint statement.

BMW's takeover of Sauber in 2005 saw them enter their own team in 2006 and in their debut season they were fifth in the constructors' championship before being promoted to second in 2007 after the exclusion of McLaren-Mercedes.

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BMW first entered Formula 1 as an engine supplier to Brabham in 1982 and the first victory of the pairing came in 1983 when Nelson Piquet won in Brazil on the way to claiming the drivers' crown.

But BMW pulled out as an engine supplier in 1987 before returning in 2000 as engine partners to Williams.

Following their decision to withdraw from Formula 1, BMW will now focus on the touring car series, Formula BMW and the American Le Mans series.

BMW in India 

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BMW had been importing 530d vehicles thus far. Now that the company has just started rolling out the 5 series from the Chengalpattu facility, near Chennai, its now possible for BMW to pass on the cost reductions to local customers.

Local manufacture of 5 series would result in a cost saving of about 40 per cent in contrast to the import duty on CBUs (completely built units) at around 120 per cent, the duty on CKD (completely knocked down) units was around 35 per cent.

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Asia was emerging as the mainstay of the company. A production base in India "underpins our long-term route to profitable growth in Asia," he said. The Indian car market was around 1.2 million units.

This was expected to go up to 2.2 million by 2015, he said.

The premium segment volume was also projected to double by then, he added.

Mr. Kronschnabl said the premium car segment in India was below 4,000 at the moment. He expected this to scale up to 10,000 by 2012-13.

BMW Local Production 

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Mini, the famous small car brand could hit the Indian roads sometime in late 2009.

He said that 90 per cent of the domestic demand for BMW vehicles would be met from the Chennai facility. The company would continue to import 7 series and X products to meet the local demand.

For the time being, only the seats of the cars are being manufactured in India. The rest of the parts are being imported.

On the possibilities of indigenization, BMW revealed that for a start the doors of the cars would be manufactured in India.

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The company will not export its Indian products.

Headquartered in Gurgaon BMW India is a 100% subsidiary of the BMW Group.

The initial investment in India is Rs.1.1 billion.

Presently, 13 dealers represent BMW in the Indian market with plans to add more dealerships by the end of 2009.

The lowest priced 3-Series vehicle will cost Rs.2.6 million.

The higher range can go up to Rs.4.2 million.

BMW Chennai 

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The CKD imports attract a duty of 15 per cent as against 60 per cent in the case of CBU (completely built unit) imports.

Further, the CBUs would have to bear local taxes.

The restrictions imposed by the Government had limited the flexibility for CBU imports. For one, there was a floor price of $40,000 c.i.f. (cost, insurance, freight) per CBU car import.

There were curbs in terms of engine capacity — 2.5 liter for petrol and 3 liter for diesel — for import without homologation (approval of set standards). The 3 series car could not be brought into the country because of these restrictions.

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Chennai as the ideal destination, given the port, good quality of supply and infrastructure advantages. Also, 40 percent of the country's automotive supply is from the southern region.

It would act as a sorting, inspection and validation point for parts in transit to its procurement center in Beijing, that would call for employment of about 30 people.

BMW New launches 

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BMW is all set to launch the MINI, three door luxury hatchback in India.

The plans had been delayed from 2007 due to feasibility reasons for the cost-sensitive market.

The BMW Mini is set to be imported and would carry a hefty price tag of 2 million rupees ($41,000).

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BMW India has a slew of launches slated for 2009 like the new BMW 3 series, BMW 7 series, and diesel variant of BMW X3.

In order to strengthen the dealership network of which presently there are thirteen, BMW will set up new dealerships in 10 more cities by end of 2010. $30 million is the investment it has made for the Indian market including the plant that was set up in Chennai.

Environmental Record 

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 The company is a charter member of the U.S. Environmental Protection Agency 's (EPA) National Environmental Achievement Track, which recognizes companies for their environmental stewardship and performance.

BMW offers 49 models with EU5/6 emissions norm and  nearly 20 models with CO2 output less than 140 g/km, which puts it on the lowest tax group and therefore could provide the future owner with eco-bonus offered from some European states, while competitive brands have an average emission CO2 output of more than 170 g/km.

Between 2006 and 2008, the brand BMW achieved a reduction in fuel consumption of 16%, more than doubling the reduction attained by the next best premium segment competitor. At the same, BMW vehicles are still well ahead of their competitors in terms of average engine output.

BMW plans to offer a car that runs on both petrol and hydrogen, to be called the Hydrogen 7. Drivers will be able to switch what fuel they are using with the push of a button on the steering wheel.

Hydrogen Shortcomings 

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Unlike many other current hydrogen powered vehicles like those being produced by Honda , General Motors, and Daimler Chrysler- which use fuel cell technology and hydrogen to create electricity to power the vehicle - the BMW directly ignites the hydrogen in its internal combustion engine.

It should be noted that hydrogen combustion as a source of energy is no where near as close as efficient as fuel cell technologies; however, this is a system that is in production.

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Nonetheless, hydrogen fuel (whether converted to energy in fuel cells or internal combustion engines) is not green as it may seem; particularly so when you also consider that producing liquid hydrogen requires vast amounts of energy. It will also only be more expensive than its sister the 760Li (no retail price has been announced), which is BMW’s biggest and most expensive sedan, with a base price tag of over $118,000, thus further diminishing its widespread appeal. As of November, 2006 only five filling stations in the entire world support BMW’s filling technology, making this car less worthwhile.

Conclusion 

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BMW has survived three major crises that have threatened the company's very existence: World War I, World War II, and a takeover bid by Daimler-Benz (founded by Karl Benz in 1883).

It is an entrepreneurial power which survived by adapting to harsh conditions.

Banned from producing products that it was built for, they explored different avenues to survive.

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Technological innovations have set it apart from all competition in that, it leads the world in vehicle suspension technology.

It was the first manufacturer to install anti-lock brake systems in its vehicle in 1980’s.

Despite being globally renowned for its luxury cars, it still maintains its legacy of aircraft engine production for various aircrafts.