Will BMW still be around in 100 years? As the company celebrates its centennial, we chart the development of one of the most recognised brands in the world.
There aren’t many entrants in the BrandZ Top 50 that have been around longer than 50 years. BMW is a worthy exception. After 100 years of success, the brand has come out all guns blazing at its centennial event with bold claims for the next 100.
According to chief exec Harald Krueger, BMW is not just about cars – it wants to be relevant to the whole experience of transport. As any futurists reading this will know, there simply isn’t going to be room in the busy and connected city of the future. And because BMW intends to be here in 100 years’ time, it’s focusing now on mobility, connectivity and the ‘personal experiences’ of its customers.
We already know it makes perfect machines. For many years BMW refused to show people in its advertising, adhering to the theory that ‘people are fallible, whereas our cars are not’. In the future it will make, as Krueger puts it, products and experiences that are “digital chauffeurs and personal companions” that can “anticipate what we want to do and make our lives easier”. The question is, is this a bridge too far?
The future is congested
According to consultancy firm Arthur D Little, almost 70 per cent of all travel today happens within urban environments, and the total amount of ‘urban kilometres travelled’ is expected to triple by 2050. Self-driving vehicles and automated delivery systems will happen. This actually bodes well for BMW, as it has already started to build for the new travel ecosystem. Its DriveNow ‘cars on demand’ service, a joint venture with Sixt, is now established in several cities in Europe and North America.
Such initiatives are encouraged by governments and local authorities that want to avoid a future of worse congestion, with consequent ecological and economic impact. Arguably, BMW is the most advanced player in the ‘mobility market’ and well ahead of its global rivals in premium automotive. According to Hacker News, 100 per cent of its product line-up will be electric (or electric enhanced) by 2020.
This reinvention sits well with where the brand has come from. There’s no question the business has grown beyond the wildest dreams of Franz Josef Popp, workshop owner and military engineer who founded the Bayerische Motoren Werke in 1916.
Originally producing motorcycles, the business quickly turned to supplying aeroplane engines through two world wars. After the war, the company refocused on the growing automotive market, eventually becoming the global business it is today with over 100,000 employees worldwide.
BMW has not only been highly effective at identifying new markets and making quality products with traditional German intensity, but also in recovering from its mistakes. For example, a brief diversion into post-war kitchen design didn’t last, as the company found its raison d’être in the motor business. From CSLs to 507s, M1s to M3s, the BMW enthusiast can reel all the names off. And most car buyers know something of the ubiquitous numerical nomenclature – the 3, the 5, and the posher 7 Series, evolving with the 1 and 2 Series to fill demand in the smaller engined, smaller vehicle segments today.
BMW is a terrific case study for sales and marketing innovation as well as the business of engineering and distribution. I’m lucky to have seen this at first hand. Many meetings ago I spent a week in the BMW Munich HQ (they call it the Four Cylinder building locally, for obvious reasons when you see it in the flesh) discussing future plans for the Mini brand. It was an exciting, if not a little painful, time for BMW as it was grappling with its Rover acquisition. Whilst it was intrigued by the famous British brand names, it was less interested in the difficult production and supply issues that kept the ‘English Patient’ on its knees.
Bernd Pischesrieder, then BMW’s chairman (cruelly dubbed ‘Mr Fishtrousers’ by Jeremy Clarkson) was related to Sir Alec Issigonis, the designer of the original Mini. He wanted to bring some British ‘class and style’ to his portfolio of brands. But he also wanted to give the Brits back the commercial intelligence to build a global car business more effectively.
In those days, people bought cars from dealers and would buy alloy wheels and accessories separately from a range of other places. BMW gave us the go-ahead to design the world’s first configurator so customers could choose modifications and accessories in real-time, in advance of buying the car.
This seems obvious now, but at the time it was a major innovation. But it wasn’t guesswork. BMW’s salesmen were already doing it in-store where the difference between the cheapest model and the most expensive (with bigger engine, leather, alloys and so on) could be literally twice the price. And the profit margins in the ‘extras’ could be over five times that of the base model.
A premium brand for everybody
The secret of BMW’s success to focus on the driver from the beginning. It was one of the first car brands to focus on consistency and coherence in the product, giving the owner confidence with an experience of driving unique and specific to BMW. There is no serial quirkiness of a Citroën or Alfa Romeo, or borrowed bits from the parts bin like older Jaguars and Fords. The petrol caps are in the same place on every vehicle, as is the badge. Switches and dials remain familiar throughout the range. The ‘feel’ of driving and handling became a deliberate engineering objective, not a lucky result. This meant that whether you drove a 3 Series or the luxurious 7 Series, the brand provided, for a price, a level of sophisticated yet accessible engineering quality. They were good to drive and easy to drive. And they looked expensive.
A brief history of advertising
This approach to consistency applied to advertising. It’s fair to say that BMW’s advertising has played a major role in the brand’s success. Its famous line ‘The Ultimate Driving Machine’, originally developed as a tactical campaign for the US market, has stood the test of time.
It came about through insight work (we all know that before every great idea there’s a great brief) into driver likes and dislikes. BMWs tended to score well on steering, ride and driver feedback – drivers said they felt ‘part of the car’ and they were different to the big, sloppy rides in the Lincolns and Cadillacs.
The creative team of Martin Puris and Ralph Ammirati also felt BMW could appeal to the more cultured, up-and-coming urban generation, looking for a car with a certain amount of European arty credibility. The uber-intellectual eponymous TV character from hit shows Frasier and Cheers would drive a BMW (and with an ironic twist it famously broke down in one episode). In the UK this campaign was executed brilliantly for many years by WCRS, drumming in the quality, technology and driving experience theme – an endearing consistency many chief marketing officers today could learn from.
When quizzed on the campaign’s longevity, Ralph Ammirati said: “Clients tend to get tired of these things and then they change them, and then they see that sales are suddenly affected, and then they jump back to it – it never fails. We can see that line from the pitch back in 1974, that’s what we presented in Munich to the BMW board. And it perfectly describes that car and the experience that you get driving that car. And that’s why it works.”
Fast forward to the centennial celebrations today and the words of chief executive Harald Krueger sum up future plans. “Nobody knows what the next 100 years will bring. But there is one thing we can be sure of: future mobility will connect every area of people’s lives. And that’s where we see new opportunities for premium mobility.”
Alastair Duncan is chief strategy officer at Splash Worldwide and was formerly founder and global strategy lead at Jaguar's global in-house agency Spark44.
This issue was first published in The Drum's 23 March issue.