The Momentum of BMW - GSA 1.21.19 Special Section

January 21 - February 3, 2019

www.gsabusiness.com

Volume 22, No. 2 • $2.25

SPECIAL SECTION

THE MOMENTUM OF

Plant Spartanburg’s newest model, the BMW X7, pulls onto a stage at the LA Auto Show to make its international debut. (Photos/Provided)

BMW

BMW plans full product launch for the X7 in March

By Ross Norton

rnorton@scbiznews.com

W

hen BMW unveiled new cars to the world, the company picked the LA Auto Show to unveil the vehicles to an international audience, but the automaker left no doubt where its U.S. cars are made.

The BMW press conference at the LA Auto Show opened with a video and a question: “How do you transport the allnew BMW X5 from the factory in Spartanburg to the LA Auto Show? … You drive.” The video shows a pin drop on a map of Greer and an arrow heading west from there, more than 3,000 miles, as the image fades to an X5 leaving Plant Spartanburg for a road trip straight across the country and into the show in Los Angeles.

A muddy X5 rolled onto the stage in front of the jumbotron broadcasting the video and an enthusiastic Bernhard Kuhnt, president and CEO of BMW of North America, stepped out.

He bragged on the latest iteration of the X5 and turned his attention to Greer’s newest model, the X7, before rolling out other new offerings – the BMW 8 Series, the new BMW M340i sedan and the BMW Vision iNEXT concept vehicle.

“This is the vehicle many of you have been waiting to see for a long time. We are very proud to present it here in its home market of the United States of America.”

Pieter Nota BMW Group

Kuhnt, who called Plant Spartanburg the “crown jewel” of the BMW manufacturing facilities, expressed confidence in the company’s ability to move into the future with this year’s new models and a future focused on innovation, starting with a nod to the new version of the X5.

“A beautiful ride across this great and simply beautiful country,” he said, refer-

ring to the video, “featuring the all new X5 – capable, confident, powerful. It’s the fourth generation and all have been made right here in the United States at Plant Spartanburg. It’s also the 10th X-model built at the plant since the plant opened in 1994.”

In a press conference webcast around the world and interpreted into four lan-

guages, Kuhnt said BMW considers the United States its second home.

“Nationwide, we employ more than 70,000 people together with our suppliers and dealers, and we believe we are driving innovation in this country,” he said.

“BMW is designing and developing new See X7, Page 14

12

www.gsabusiness.com

SPECIAL SECTION: THE MOMENTUM OF BMW

January 21 - February 3, 2019

X5 gets updates as model approaches 20 years

By Ross Norton

C

rnorton@scbiznews.com

ar and Driver magazine said the BMW X5 was good from the beginning and so the company had a simple charge in developing the fourth generation of Plant Spartanburg’s most popular product.

“The Bavarians are perfectly content to prove that this X5 is simply a better, more capable, and more advanced version of the last X5. And that’s exactly what it is,” the magazine said in a review for car aficionados.

That’s an encouraging assessment for an Upstate economy that has reaped the benefits of the plant’s most stalwart performer for almost 20 years. The company says the BMW X5 has defined what it calls the premium sports activity vehicle segment, selling more than 2.2 million units worldwide.

The success of the plant has run parallel to the success of the X5. Just a few years before they started producing the X5, the new plant was a $600 million investment and a promise of 2,000 jobs. Today, the company has invested nearly $10 billion and plans to have 11,000 workers by 2021.

Of the vehicles produced in the Upstate, 70% are exported, making BMW the

BMW says it invented what it terms the sports activity vehicle when it built the first X5 almost 20 years ago. The X5 is the top-selling of the X-models and BMW Group executives credit the line for helping the company exceed its sales goals last year. (Photo/Provided)

leading exporter of cars in terms of value, according to a news release.

A University of South Carolina study in 2017, put the annual economic impact

of the plant at $38.5 billion annually.

BMW Manufacturing fact sheets show the X5 as the top vehicle to roll off the plant’s assembly line. The last official

numbers are for 2017 and show Plant Spartanburg produced 155,324 X5s, 103,582 X3s, 48,462 X4s and 36,915 X6s.

BMW marked the 3 millionth X5 on

January 21 - February 3, 2019

SPECIAL SECTION: THE MOMENTUM OF BMW

BMW X5 xDrive40i

“The Bavarians are perfectly content to prove that this X5 is simply a better, more capable, and more advanced version of the last X5. And that’s exactly what it is.”

Six-cylinder in-line petrol engine, eight-speed Steptronic transmission Acceleration 0-62 mph: 5.5 seconds Top speed: 151 mph Fuel consumption combined: 32.1-33.2 mpg

BMW X5 xDrive50i (not available in Europe)

Car and Driver magazine

March 24, 2015.

Launched earlier in 2018 and officially introduced art the LA Auto Show, the all-new, fourth-generation BMW X5 retains the same basic shape of the previous incarnation. The X5 offers an array of expanded driver assistance systems, such as “extended traffic jam assist” for limited access highways that uses an interior camera to monitor the driver’s attention to the road ahead, according to a news release.

“The BMW X5 embodies the origins of the BMW X family and, in its fourth generation, sends out its most powerful message yet in terms of presence and modernity,” Adrian van Hooydonk, senior vice president of BMW, said in a news release.

CRBJ

Reach Ross Norton at 864-720-1222 or @RossNorton13 on Twitter.

www.gsabusiness.com 13

V8 petrol engine, eight-speed Steptronic transmission Acceleration 0-62 mph: 4.7 seconds Top speed: 155 mph Fuel consumption combined: 24.4 mpg

BMW X5 xDrive30d The workers at Plant Spartanburg build more X5s than anything. The plant produced 155,324 X5s in 2017.

(Photo/Provided)

Six-cylinder in-line diesel engine, eightspeed Steptronic transmission Acceleration: 0-62 mph: 6.5 seconds Top speed: 143 mph Fuel consumption combined: 41.5-47.1 mpg

BMW X5 M50d

Six-cylinder in-line diesel engine, eightspeed Steptronic transmission Acceleration 0-62 mph: 5.2 seconds Top speed: 155 mph Fuel consumption combined: 39.2-41.5 mpg

14

www.gsabusiness.com

SPECIAL SECTION: THE MOMENTUM OF BMW

January 21 - February 3, 2019

The BMW X7 is the biggest X-model in the lineup, with dimensions similar to SUVs. Three rows of seats come standard. (Photo/Provided)

X7, from Page 11

technologies for the world. … We have experienced 12 months of growth in the U.S. We’ve rolled out new models … in fact, we are in the middle of the largest product offensive in our company’s long history with the youngest portfolio that we’ve ever seen.”

Pieter Nota, head of sales and brand for BMW Group, introduced the Spartanburg-made X7 and called it a sign of the company’s commitment to the U.S. market. Although BMW calls them sports activity vehicles – SAVs – the rest of the industry calls them SUVs, and the X7 is the largest yet for BMW. Nota said 1,500 had been sold by preorder before the press conference. The

LA Auto Show ended in the first week of December.

“This is the vehicle many of you have been waiting to see for a long time,” Nota said. “We are very proud to present it here in its home market of the United States of America. As the pinnacle of the X-family, it offers a new level of luxury. It’s big, it’s bold, and has an incredible on-road presence. We truly believe it also offers the very best driving capabilities in its class.”

According to a company new release, BMW X7 includes an array of driver assistance systems available for enhancing comfort and safety. These systems process camera images together with the data gathered by radar sensors and together they help drivers in a

Before the first official BMW X7 was introduced to the world at the LA Auto Show, 1,500 people had made down payments to buy the vehicle. (Photo/Provided)

January 21 - February 3, 2019

SPECIAL SECTION: THE MOMENTUM OF BMW

There are four model variants of the X7, including a six-cylinder that got better than 40 miles per gallon in early tests and a V8 that trades mileage for power. (Photo/Provided)

variety of situations. They ease the driver’s workload in monotonous driving conditions, such as traffic jams and heavy flowing traffic, and make it easier to stay in control in awkward traffic situations, according to specs provided by BMW. These systems mark the latest advances on the road to automated driving, the news release said. The vehicle has cruise control with braking function, as well as collision and pedestrian warning with “city braking” function, which also alerts

the driver when a cyclist is detected. An optional cruise control feature is capable of braking the car to a halt then setting it back on its way automatically.

“Ladies and gentlemen, the luxury segment is our home turf and automobiles like the X7 are testament to that,” Nota said at the press conference. “We are moving ahead with our expansion in the luxury class.”

Reach Ross Norton at 864-720-1222 or @RossNorton13 on Twitter.

Model variants of the BMW X7 BMW X7 xDrive40i:

Six-cylinder in-line petrol engine, eight-speed Steptronic transmission.

Acceleration 0-62 mph: 6.1 seconds Top speed: 152 mph Fuel consumption combined: 31.4-32.5 mpg

BMW X7 xDrive50i:

V8 petrol engine, eight-speed Steptronic transmission.

Acceleration 0-62 mph: 5.4 seconds, Top speed: 155 mph Fuel consumption combined: 24.8 mpg

BMW X7 xDrive30d:

Six-cylinder in-line diesel engine, eight-speed Steptronic transmission.

Acceleration 0-62 mph: 7.0 seconds, Top speed: 141 mph Fuel consumption combined: 41.5-43.5 mpg

BMW X7 M50d:

Six-cylinder in-line diesel engine, eight-speed Steptronic transmission.

Acceleration 0-62 mph: 5.4 seconds Top speed: 155 mph Fuel consumption combined: 38.2-40.4 mpg

www.gsabusiness.com 15

16

www.gsabusiness.com

SPECIAL SECTION: THE MOMENTUM OF BMW

January 21 - February 3, 2019

Klaus Frรถhlich introduced the BMW Vision iNEXT at the LA Auto Show. He said the car represents the future of all BMW vehicles because of the technology on the inside. Frรถhlich said the automaker has been working toward autonomous vehicles for a decade and will be ready to put them on the streets in 2021.

(Photos/Provided)

January 21 - February 3, 2019

SPECIAL SECTION: THE MOMENTUM OF BMW

www.gsabusiness.com 17

The workers at Plant Spartanburg produce 1,400 vehicles every day, 70% of them bound for export. The job takes a workforce that will reach 11,000 workers on site over the next two years, according the BMW. (Photos/Provided)

18

www.gsabusiness.com

SPECIAL SECTION: THE MOMENTUM OF BMW

January 21 - February 3, 2019

BMW plans to roll into autonomous future with the Vision iNEXT

By Ross Norton

T

rnorton@scbiznews.com

he BMW Vision iNEXT was the only car to drive itself onto the stage at the BMW press conference during the LA Auto Show.

Klaus Fröhlich, head the board of development for BMW, introduced the car to the news media and sold it not so much for its futuristic look, but for its futuristic technologies.

With a preamble about the progress BMW has made in developing electric-powered cars of the near future, Fröhlich said the iNEXT is the foundation of what he believes is the pretty-near future of widespread use of self-driving cars.

“The next challenge we gave ourselves — to offer safe, autonomous driving by 2021,” he said. “Our ambition is clear. We want to be leading in this field, too.”

Fröhlich said BMW’s research on autonomous driving solutions goes back more than10 years.

“And we have learned the challenges to overcome in autonomous driving,” he said. “And they are enormous. We are planning to take our technology, which enables safe autonomous driving, to serious maturity by 2021.”

Fröhlich said he expects BMW to be ready before the rest of society is. He said

BMW officials said the all-electric Vision iNEXT is the world’s first smart car, with 5G connectivity. (Photo/ Provided)

society’s challenges include legal and regulatory hurdles before autonomous vehicles are turned loose on a large scale.

“But we at the BMW Group will have the technologies ready to go,” Fröhlich said.

The emission-free iNEXT concept brings all of the BMW Group’s strategic innovation fields together for the first time, Fröhlich said. The fully electric

iNEXT has the same size and proportions of a BMW sports activity vehicle.

The iNEXT showcases the BMW Group’s approach in the strategic fields of autonomous driving, electric mobility, connectivity and intelligent design, according to a news release. The series-produced version of the BMW iNEXT will arrive in 2021.

“Let’s talk about the interior. Driver orientation is still important to us – we invented it,” Fröhlich said. “But digitalization and autonomous driving open up an opportunity to totally rethink the way we use the interior of a car. Our ambition was to create a place which enhances people’s quality of life — a new favorite space. Using it will be intuitive, comfortable and smart. Ultimately, the BMW Vision iNEXT will add a new dimension to sheer driving pleasure.”

Fröhlich called it the first smart car.

“The iNext is our vision of the future of mobility,” he told media at the press conference. “This vision car is surely something you’ve never seen before.

It’s our trailblazer for a variety of future technologies. … It simplifies driving. It enhances the experience through artificial intelligence and it improves networking through increased 5G connectivity.”

According to a company news release, at the BMW AG annual general meeting in May 2018, Harald Krüger, chairman of the board of management at the BMW Group, said “the iNEXT project will provide our building blocks for the future, from which the entire company and all of its brands are set to benefit.”

Reach Ross Norton at 864-720-1222 or @RossNorton13 on Twitter.

January 21 - February 3, 2019

SPECIAL SECTION: THE MOMENTUM OF BMW

www.gsabusiness.com 19

Survey: Auto executives bracing for change in supply chain Staff Report

A

gsanews@scbiznews.com

uto executives are predicting long-term benefits and shortterm drawbacks from the new version of NAFTA, the United States-Mexico-Canada Agreement.

LevaData, a California company that sells AI services in the supply chain, conducted a survey on how the new North American trade deal and Chinese tariffs may affect the automotive industry.

The survey of 100 U.S.-based automotive executives was conducted online in December by Propeller Insights on behalf of LevaData.

The majority (78%) of automotive executives feel that the changes required

by USMCA will have a positive impact on their company in the long term, and more than half (53%) feel USMCA will ultimately increase North American vehicle manufacturing and provide a net improvement for workers and consumers, according to a news release from LevaData.

However, many of the participants say that production costs will increase significantly, resulting in higher prices for consumers: 41% believe production costs will increase by 10% over the next three years, and 26% believe the increase could be 25% or more, the news release said. Most, 58%, think these increases will results in higher costs for consumers.

Electronic components were called out as one area where increased costs are expected, with 39% agreeing USMCA will somewhat or significantly impact costs. The impact of these increases will likely be multiplied as these components increasingly make up a larger share of a car’s overall cost, the news release said.

LevaData said an anticipated rise in labor may be a signal that layoffs similar to GM’s recent cuts are coming to other automakers, the release said. Labor is highlighted as an area that will become

South Carolina is home to more than 40 Tier 1 suppliers for Plant Spartanburg and more than 300 others are spread across the rest of the country. Automakers and elected officials alike have expressed how tariffs may affect the industry. (Photo/Provided)

more costly, with 73% stating employee payroll costs will increase or their workforce will be cut.

In addition to raising prices on finished goods, auto execs will aggressively seek savings in the supply chain to reduce the impact of higher production costs, the release said. Of the executives polled, 36% plan to renegotiate part supply deals to pass costs to suppliers and 35% will look for cost savings in the production process.

Pressure to source components from suppliers near North American assembly plants is also a top concern among auto manufacturers specifically: • 61% predict suppliers near assembly plants will be favored somewhat or significantly.

• 78% cite finding North American suppliers or identifying alternate suppliers as a near-term priority for their supply chain. BMW Manufacturing has more than 300 suppliers in the United States and more than 40 of them are located in South Carolina, according to a BMW fact sheet.

• 63% of automotive executives believe production costs will increase due to USMCA. • 53% feel USMCA will increase North American vehicle manufacturing and provide a net improvement for workers and consumers.

Proposed tariffs on $200 billion of Chinese goods is also top of mind; 30%

of the auto executives surveyed expressed concern about the impact these tariffs could have on their company, compared to 9% concerned over USMCA’s impact.

“The adoption of USMCA, threats of tariffs on Chinese goods and concerns about the security of tech components made in China are going to be major concerns for the automotive industry in the coming years,” Rajesh Kalidindi, founder and CEO of LevaData, said in the news release. “Auto makers will require a better upstream assessment of geopolitical risk considerations going forward. Knowing where tariffs might be applied and how they could impact cost and supply will be increasingly important — and virtually impossible to manage in Excel.”

20

www.gsabusiness.com

SPECIAL SECTION: THE MOMENTUM OF BMW

January 21 - February 3, 2019

BMW Group gives props to X-series for record sales worldwide Staff Report

T

gsanews@scbiznews.com

he BMW Group delivered nearly 2.5 million vehicles to customers around the world, surpassing its sales goal by 1.1%.

The company did it by selling more BMWs and Rolls-Royces than ever before, according to a news release.

Those brands plus Mini accounted for the eighth consecutive annual sales record by delivering 2,490,664 vehicles.

Sales of electric BMW and Mini cars grew by 38.4% compared to the previous year.

The BMW Group expects to achieve a slight increase in global sales in 2019, in the low to mid single-digit area. The generally good economic environment and positive forecasts for the premium segment, in combination with new models, especially the updated and expanded X-family portfolio, are expected to support sales growth in 2019, according to the release.

“However, political and economic circumstances are expected to remain volatile, which could have an impact on the automotive market,” the news release said.

In mainland China, the BMW Group expects solid sales growth in 2019. While the Chinese market has normalized, the premium segment is expected to show good growth potential, according to a BMW analysis. China-manufactured BMW vehicles will be the main growth drivers, especially the BMW X3, which will be fully available in 2019, after a plant in China opened June 2018.

It is the first X-model not manufactured in Spartanburg County.

“In Europe, the BMW Group anticipates slight sales growth in 2019, although depending on economic development in the region, we cannot rule out that sales

volume may remain at last year’s level,” the release said.

Although the overall car market in the United States seems to have reached a peak, forecasts for the premium segment show growth potential for 2019, BMW said. “Given the positive outlook for both the premium car market and the overall economy, the BMW Group expects to achieve a slight sales growth, with growth driven largely by our renewed SUV-lineup,” the release said.

The company is looking for the new BMW X7 to boost interest in the next year.

“While we expect market conditions to remain challenging this year, new models like the all-new BMW X7 and the seventh generation of the BMW 3 Series, combined with an ever-greater focus on our customers and their needs, mean we at the BMW Group will continue on our successful course,” Pieter Nota, member of the Board of Management of BMW AG, said in the news release. Nota is responsible for sales and brand for BMW. Last year the BMW brand achieved its highest-ever annual sales and brand’s biggest growth drivers were the BMW X vehicles, thanks to the introduction of the BMW X2 early in 2018 and the extension of BMW X3 production to China and South Africa, according to the news release.

“We are proud to have achieved our best-ever annual sales result, despite a number of important model changeovers and significant, ongoing headwinds in several major markets,” Nota said in the release. “2018 saw the introduction of several exciting brand new models including the BMW X2 and the BMW 8 Series, as well as the launch of the new generation BMW X4 and BMW X5 and the long-awaited BMW Z4. I am confident the momentum generated by these new models will continue through 2019.”

Photo/File

January 21 - February 3, 2019

SPECIAL SECTION: THE MOMENTUM OF BMW

Sales of electric-powered cars jumped last year for BMW, with an increase of more than 38% over the previous year.

(Photo/Provided)

BMW Group counting on an electrified future Staff Report

B

gsanews@scbiznews.com

y 2025, BMW Group will offer at least 25 electric-powered cars and at least 12 of them will be fully electric.

Klaus Fröhlich, head of the board of development for BMW, introduced the news media to the BMW Vision iNext, an all-electric vehicle, at the LA Auto Show.

He said if the future is electric, BMW is ready to respond.

Sales leave little doubt that, at least in 2018, the public is also ready to respond.

BMW Group, which makes electric Minis in addition to BMWs, last year saw a worldwide increase in sales of 38.4% over 2017.

Fröhlich said BMW started investing heavily in developing technology for electric cars more than 10 years ago and the company is, in fact, now working on the fifth generation of its electric drive train.

In total, 142,617 electric-powered BMW and Mini vehicles were sold around the world in 2018, according to a news release. The plug-in hybrid BMW 530e was the company’s top-selling electric vehicle in 2018. The company sold 40,260 of the vehicles around the world, accounting for more than 12% of global BMW 5 Series sedan sales.

It was also the year’s best-selling luxury plug-in hybrid vehicle in the United States.

Meanwhile the Mini Countryman Cooper SE ALL4 was delivered to 13,219 customers around the world, accounting for 13.3% of all Mini Countryman sales. The introduction of an optional new and more powerful battery helped grow i3 sales by 10.6% in 2018 with a total of 34,829 delivered worldwide, the news release said.

“We are delighted to have clearly surpassed our stated target of selling 140,000 electrified vehicles in 2018 and believe that by the end of 2019, there will be half a million electrified BMW Group vehicles on the roads,” said Pieter Nota, head of sales and brand for BMW Group.

At the Los Angeles press conference,

Fröhlich said the trajectory of sales tells the story.

“In 2017 we delivered 100,000 electrified vehicles to customers,” he said. “This year (2018) we delivered 140,000 and by the end of next year we will have sold half a million electrified vehicles. Now we are one of the leading electric vehicle providers. … So for us, electromobility is already our new reality.”

Stephan Juraschek, vice president for the development of electric powertrains for BMW, said in a prepared statement that the latest generation of the powertrain is moving the company’s capabilities forward quickly.

“A crucial advantage of this fifth-generation system is that the electric motor, transmission and power electronics now form a single, highly integrated electric drive component,” he said. “This extremely compact unit takes up far less space than the three separate components used in preceding generations. Its modular construction means that it is scalable, too, allowing it to be modified to suit all sorts of different installation spaces and power requirements.”

He said the BMW Group will fit the next generation of battery cells in the new, scalable and more powerful vehicle batteries alongside the introduction of the new electric drive components. The “building block” concept will allow the new batteries to be incorporated flexibly into every vehicle architecture.

“On the one hand, we will have flexible vehicle architectures and, on the other, the scalable and modular building blocks for the electric drive systems,” Juraschek said in the statement. “This will bring about a lasting increase in flexibility. In future, we will be able to swiftly decide which models we are going to equip with what mix of all-electric drive, plug-in hybrid drive or exceptionally efficient combustion engines. This will let us partially or fully electrify each model in accordance with market demand, creating the basis for the mass-market introduction of pure battery electric vehicles in the future.”

www.gsabusiness.com 21

22

www.gsabusiness.com

SPECIAL SECTION: THE MOMENTUM OF BMW

January 21 - February 3, 2019

Plant Spartanburg saves money while practicing stewardship Staff Report

B

gsanews@scbiznews.com

MW Manufacturing takes up 7 million square feet of space, just for the interior of its plant. The company has implemented measures throughout its time in Greer to take care of the land it occupies.

The plant’s original landfill gas project was implemented in 2003 in conjunction with partners Ameresco and Waste Management. Infrastructure was installed at the Palmetto Landfill to collect, clean and compress the methane gas; the gas is then transported through a 9.5-mile pipeline to the BMW plant. The methane gas coming from the landfill is used to more efficiently cogenerate electrical power and heat water, according to a company fact sheet.

In 2009, BMW replaced the original four turbines with two new highly efficient turbines that increased electrical output from 14% to almost 30%. Currently, nearly 50% of the plant’s total energy requirements are provided by methane gas, the fact sheet says.

Implementation of the new landfill gas program reduces CO2 emissions by 92,000 tons per year, up from 65,000 tons previously reported for the four turbines

Greer is home to the largest BMW plant in the world.

(Photo/Provided)

operating 85% of the time, according to the fact sheet.

BMW estimates that it saves an annual average of $3.5 million in energy costs.

In April 2018, the plant ranked No. 7 on the U.S. Environmental Protection Agency’s Top 30 On-site Generation list of the largest green power users.

In February 2012, BMW Manufacturing added new solar panels to provide solar energy to fully power the 24,000-square-foot Zentrum Museum and three new electric vehicle charging stations, which are available for public use. The 400 solar modules, each capable of producing 240 watts of energy, save approximately 135,000 kilowatt hours per year, according to the company.

Sustainable Production Technology • A hydrogen fuel fleet of material handling equipment delivers parts to the production line throughout the facility. With more than 500 pieces of equipment, it is thought to be the largest hydrogen fuel cell fleet in the world on a single site.

• From 2006 to 2017, Plant Spartanburg reduced water consumption by 53%, energy consumption by 65%, waste disposal to landfills by 86% and industrial wastewater by 58%.

• The amount of waste reused, recycled or recovered totaled 97% in 2017. Only 3% of waste was sent to a landfill.

• From 2015 to 2017, the plant recycled enough paper, cardboard and wood to save 1.4 million trees; saved 37 million gallons of oil; and saved 377 million kilowatt hours of electricity — enough energy to power 198 million homes for a year.