Damage Control

The Positive Side of Diesel

BMW top product manager Hildegard Wortmann in front of a BMWi3 source BMW Ansgar Werr
BMW's top product manager Hildegard Wortmann is confident about diesel technology as well as the company's electric cars, known as BMW i.
  • Why it matters

    Why it matters

    BMW sales could suffer from the Volkswagen diesel emissions scandal if customers turn away from diesel-powered cars.

  • Facts

    Facts

    • BMW is the world’s largest maker of luxury cars ahead of Mercedes and Audi; last year it sold 2.1 million vehicles, mostly with gasoline and diesel engines.
    • The Munich-based carmaker has not seen a change in demand for its fossil-fuel powered cars so far, its top product manager says.
    • BMW launched its first electronic car line in 2013, but e-cars accounted for just 12,500 of the 1 million cars BMW sold in the first half of 2015.
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  • Audio

    Audio

  • Pdf

Known for its sporty and powerful cars, BMW has been the world’s biggest maker of luxury cars for years, ahead of rivals Mercedes and Audi.

Most of the 2.1 million cars the Munich-based carmaker sold last year have conventional gasoline or diesel engines, although a small proportion is powered by electric power. BMW, which also makes the Mini and Rolls-Royce models, launched its first e-car line in 2013, but sales growth has been sluggish. In the first half of 2015, e-cars accounted for just 12,500 of the 1 million cars BMW sold.

The Dieselgate scandal at Volkswagen, which also produces Audi and Porsche cars, has not led to a change in demand for BMW’s cars, the company’s top product manager, Hildegard Wortmann, told Handelsblatt in an interview.

The 49-year old manager explained why diesel cars are here to stay for a while despite VW’s emissions manipulation scandal and how electric cars can be made more attractive.

 

Handelsblatt: Ms. Wortmann, Volkswagen has dominated the headlines for months. Have you noticed that the emissions scandal is affecting the auto industry as a whole?

The entire industry is feeling the effects. It isn’t a pleasant subject, and it doesn’t make working with government agencies and regulators any easier. You can’t get away from it, even if you’re a company, like ours, that isn’t even affected by it.

Have regulators already adopted a sharper tone toward BMW?

No, I wouldn’t say that. But the subject of emissions will receive a lot more attention.

Are you worried about the future of diesel technology?

They’re always calling it “Diesel-gate.” But I believe it ought to be called “VW-gate” instead. Diesel is still one of the most efficient and best propulsion technologies we have. Europe would be unimaginable without diesel. The high proportion of diesel vehicles is one reason why Europe’s CO2 emissions are significantly lower than those of the United States.

Couldn’t electric cars and other alternative forms of propulsion replace diesel?

The proportion of electric and fuel car cars is certainly growing. But the infrastructure simply isn’t far enough along for the technologies to replace diesel across the board. That’s why there is no way around diesel, provided you have the right diesel technology, which I can certainly claim we do.

Are customers in the United States and Europe turning away from diesel vehicles?

We are not seeing any such effect in the United States or elsewhere. There is no hesitation to buy diesel cars, nor is there a greater preference for gasoline-driven cars. For instance, drivers interested in the X5 Diesel are still buying that car. They have enough confidence in the BMW brand and in our technology.

Are you worried about the reputation of the “Made in Germany” label or of German engineering?

I hope that, through a combined effort, we will manage to patch things up very quickly. Everyone in the business is doing his best to make that happen.

 

023 BMW - WTB 2014 resume

 

Does the scandal prompt you to consider speeding up your electric car strategy?

Our strategy hasn’t changed. We already set the course for electromobility early on with the BMWi, and we are now expanding that course in a consistent manner. I think we are in a very good position.

The i3 has been on the market for two years now. How has it been received?

Two years is a relatively short amount of time. Still, sales figures are respectable. We are in third place worldwide, and one in 10 electric cars is now an i3. This year, we sold more than 20,000 of our i-vehicles by the end of September. The i3 was the top-selling electric car in Germany last year.

How much are customers really interested in electric cars?

Everything is moving in the right direction. Of course, we would have preferred it if the initial phase didn’t take this long. But in some markets, we simply need regulatory support. Take Norway, for example. The i3 is the top-selling BMW model there. Why? Because Norway is pursuing a very progressive electromobility strategy. There are charging stations all over the capital, Oslo, and parking is free. And they also have tax incentives. As you can see, if you set the right course, electromobility works extremely well, and customers love it.

Is there any movement in Germany?

Germany is still having a very tough time with charging infrastructures, and there are insufficient incentivizing measures. It will take longer for the market to develop here.

What can the auto industry do to get customers excited about electric cars?

For many people, electromobility is still an act of denial. It makes people think of environmentalism, burlap bags and the like. But that has nothing to do with the i3 or the i8. Everyone who test-drives the i3 gets out with a smile on his face. It’s just a lot of fun to drive that car. And I believe all of us simply haven’t quite figured out how to adequately convey this sense of fun and thereby win over customers.

Is Tesla helping to make electric cars more attractive to customers?

I’ve always said that Tesla did all of us a big favor. Tesla made electromobility sexy. Of course, Tesla is primarily and American and, in particular, a California story. Its global importance is relatively minor.

Since then, the industry has been intensively discussing the right range and how an electric car can be equipped with large numbers of batteries.

We can also provide the i3 with a range of 500 kilometers, but it makes no sense whatsoever to drive around with so much weight in batteries. It is a megacity vehicle, after all. Of course, developments in battery technology are continuing. We are now getting more high-efficiency batteries. Of course, we will keep up with the upgrades and will increase ranges accordingly. But we will not allow the issue of range to predominate.

 

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Taxi apps like Uber and Lyft are gaining more and more users in the United States, not just among millennials, but also bankers and senior citizens. Are you preparing for the day when people will no longer need their own cars?

I’m convinced that there will always be a need for individual mobility. Especially in the premium segment, there is indeed an absolute value to having your own vehicle and, along with it, the freedom to get into and use a luxury vehicle whenever you want. Nevertheless, alternative concepts in car-sharing are becoming more and more relevant. Luckily, we entered the market early on with DriveNow. I think we’re in a good position. We’ve also added the i3 to the DriveNow fleet. We have 400 i3s in Copenhagen alone – the biggest e-car-sharing fleet in the world.

How do you see the roles of Google and Apple in the auto industry?

Apple and Google have brought us new developments in digitization. I see them less as competitors, but rather as accelerators and, in the broadest sense of the word, as inspiration when we ask questions like: How far can we go? What can we do? But they also play a role when we set limits, such as on the issue of how much we want to connect drivers to the internet and electronic equipment, and what we do with customer data. 

In light of the many shifts in the auto industry, does BMW as a brand need to change?

We have a strong core brand and the M and i classes. We are among the top players in the performance market with the M class. Customers in the United States, in particular, are very enthusiastic about the M models. On the other hand, we can do well in terms of forward-looking issues with the i models. It’s clear that BMW will always remain loyal “Sheer Driving Pleasure” and “The Ultimate Driving Machine.” I spend every day making sure that’s the case.

Ms. Wortmann, thank you for this interview.

 

Astrid Dörner conducted the interview in Los Angeles. To contact the author: adoerner@handelsblatt.com

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