Not so long ago, there was no need to explain the achievements of our industry to anyone in Germany. It was seen as the flagship of Germany as a business location. But today there is widespread debate whether the automotive industry even has a future.
German manufacturers have more than 600 years of combined experience in individual mobility. At the moment, many are underestimating our ability to constantly reinvent ourselves. But when push comes to shove, it‘s better to be underestimated than overestimated. Even in the past, success was no guarantee for the longevity of companies following significant leaps in technology, as many examples show. Once-strong, established companies and even entire industrial sectors disappeared from the market because they failed to recognize, or ignored, disruptive trends in their environment.
The opportunities of digitalization are now greatly accelerating and intensifying disruption in all areas of the economy. Nowadays, German companies only last about 8 to 10 years before disappearing because of insolvency or, for example, acquisition by a more efficient competitor. The average age of large companies has also fallen significantly over the last 20 years, which begs the question: What is 600 years of German engineering worth in the digital age?
The current upheaval in the automotive industry is driven by the new possibilities of digitalization.
Personally, I believe in the German automotive industry. Our know-how and virtues, such as inventiveness, precision and diligence are particularly valuable in times of transformation. The BMW Group is in its 102nd year. We have proven that we can cope with both innovation and crisis. The company even remained profitable throughout the global financial crisis. The current upheaval in the automotive industry is driven by the new possibilities of digitalization. At the same time, there is also a socio-political mandate. We see both as an opportunity, and we take a holistic approach to mobility.
We are tackling two spheres of activity: e-mobility and autonomous driving. The future of mobility will be decided in cities. The solution is not to have more and more cars, but cars that are used more intelligently. Drivers need incentives, not bans. The radical de-carbonization of the transportation sector is politically desired and has been decided worldwide. The future belongs to emission-free driving. The long-term CO2 fleet targets in all automotive markets worldwide can only be achieved if there is a significant increase in the share of electric vehicles and associated infrastructure. When it comes to electromobility, we at BMW also rely on our core expertise: the engine. We have defined the value chain in the electric drive train as our core business. With the exception of battery cells, we will do everything ourselves in e-mobility – more than any competitor. We focused on Germany at an early stage, initially with the BMW i3 and i8 in Leipzig.
We will be moving on to the next dimension of our electric vehicles soon. We manufacture the BMW i Vision Dynamics as an all-electric, four-door sedan at our main plant in Munich. Production of the BMW iNEXT, the next driver of innovation, begins at our Dingolfing plant in 2021. Ranges of 600 kilometers to 700 kilometers (372.8 miles to 435 miles) will be realistic in a few years. When that happens, driving an electric car will become attractive for many customers, even over longer distances. Rising demand requires an adequate energy supply. It must be cost-competitive in Germany when compared to other countries. And, last but not least, if our society decides in favor of zero-emission mobility, then we should all stand united behind it and not search for a fly-in-the-ointment again.
We already employ more IT specialists than mechanical engineers.
In the second important future field of mobility – autonomous driving – the German automotive industry faces competition from IT companies in Silicon Valley and China. Their strengths lie in the areas of data processing and software, while our strengths are in hardware and engineering. The combination of these two worlds will ultimately define the car of the future. Still, the automobile cannot be compared with a smartphone. When it comes to cars, safety is paramount with the lives of passengers and traffic participants at stake in extreme cases. The security of our customers and the protection of their data are top priorities for the BMW Group.
The first developers moved to our new campus for autonomous driving in Unterschleissheim near Munich this fall. Today, 500 BMW employees work hand-in-hand with Mobileye and Intel employees on the campus. This is an example of how we enter into new strategic partnerships, thereby gaining new skills. A data center is also being built there as a prerequisite for autonomous driving. A look at the figures reveals the Herculean task ahead of us. At the end of the year, we will have 70 petabytes of storage capacity, 200 PB by the summer of 2019 and 500 PB in 2025. To illustrate: 500 petabytes correspond to a stack of DVDs that would be well over 100 kilometers high, without cases. This is further proof that the BMW Group is transforming itself from a provider of premium mobility and services into a technology group. We already employ more IT specialists than mechanical engineers.
In Germany, we see the glass as half empty. With this attitude disruption is of course interpreted as a threat. But the opposite is true. I am firmly convinced that this transformation will make the automotive industry even stronger. The car isn’t going away. It will accompany us much more intensively, understand us and learn from us. In this way, it will make our lives easier and better than hardly anyone believes it can today.
This op-ed first appeared in WirtschafstsWoche, a business weekly part of the Handelsblatt Media Group. To contact the author: email@example.com