While VW writhes, BMW daren't get complacent

EDITOR'S BLOG: Ian Robertson, a Brit member of the German car maker's board, admits the industry has big challenges ahead.

by Matthew Gwyther
Last Updated: 24 Feb 2016

The UK motor industry has plenty to be content about at the moment. A record year has seen turnover of £69.5 billion, making Britain the third largest car producer in Europe. We export more vehicles than we have done for a generation and automotive now counts for almost 12% of UK overseas trade.

And yet at the annual dinner of the SMMT last week there was a slight sense of foreboding in the air - all down to VW and Dieselgate which has shaken many in the industry.

Just afterwards I met Ian Roberston, the BMW board member, industry veteran and probably the most powerful Brit in the global car industry. BMW is still doing pretty well despite the slowdown in China (now the biggest car market in the world). It’s a big player in the UK too, not only selling its eponymous product but also Minis and Rolls Royces.

Roberston wouldn’t be seen dead crowing but it’s hard to see how BMW will not benefit, at least in the short term, from VW’s shame. In the USA, for example, BMW already outsold Audi 2:1 and it will capitalise on this advantage while its great Bavarian rival is distracted and wound up in infighting and legal red tape.

What did Roberston make of the unfolding horror story? ‘VW and diesel is their issue. BMW has not been involved in that - we adhere to every legislative framework.’ What did they think they were doing? ‘I do not know,’ he shrugs. ‘They had a set of circumstances and development solutions. But why, who , what and how...we’ll see.’

Read more: EXCLUSIVE - The Audi boss in the eye of an emissions storm

Could such a thing ever happen at BMW? ‘There are major differences in culture between the two companies. We’re far more open. I’d say we have a set of values that are very strongly embedded. In fact we are never satisfied with ourselves. I’d say we’re not very good at celebrating success when we achieve it. Always onto the next goal.

‘The thing about diesel is that it’s regional. It’s small in the USA, non-existent in cars in China, quite small in Japan and Korea. It’s primarily a European fuel. However it has good i.e. low CO2 levels and driving capability. The EU 6 rules mean it is very clean indeed. And each barrel of oil must make diesel - it cannot produce petrol alone.’

He did however agree that the second strand of the VW scandal - the difference between lab tests and what cars actually drink and emit when on the road being driven in real life was ‘now a real discussion point’ and will ‘accelerate us towards zero emissions.’

‘We like a set of targets set by governments but we don’t like being told how to do it,’ he says. ‘That doesn’t act as a differentiator between companies. And we excel at innovation.’ It’s true that BMW’s electric hybrids are now doing well - the i3 , for example, sells big numbers in California.

And what about the overall effect on the Made in Germany brand? Is the VW taint likely to extend to other German manufacturers? ‘This remains very strong. It’s not just resting on today’s reputation. It’s been built up over years on engineering strength combined with a clear industrial policy. It’s certainly wider than the car industry. The UK used to have it and lost it - so this shows it can be lost. But Britain is winning it back now which is good.’

BMW is 100 years old next year. It makes just over two million vehicles annually, remains family controlled and is the world's biggest premium car maker by sales and very nicely profitable. But change is coming fast.

‘The next 5-10 years will see the most profound change during the last 100 years,’ says Robertson. ‘Business models are changing fast, the combustion engine is challenged for the first time. There are other huge disruptive shifts. Urbanisation is changing the face of mobility. China has nine megacities over 10 million people. You simply cannot continue with 6 lanes of traffic bumper-to-bumper in Beijing on a Sunday.’

He agrees that the young have a different attitude towards cars than they did a few decades ago. ‘The car doesn’t fit into the world of the young as it once did. I bought my first car at 17 and I was out of there. I wanted to go places and it meant freedom. You had a car at school and a whole new world of friends opened up. Now you have SnapChat. Now 80% of Japanese kids don’t have a licence.

‘Car ownership in highly urban environments is difficult. Parking in London is tough and expensive. A coming generation may never actually own cars in the old sense but they will still have aspirations to travel in premium vehicles when they need one. This may mean just sharing one for 20 minutes per day but the car will remain the star. It will just be digitised and connected. And it will eventually be fully automated leaving you to concentrate on other things.’

BMW has plans for this new world - its DriveNow shared ownership scheme in cities is ahead of the opposition. But it will bring the company into direct competition with feisty outfits like Uber. There is a world to play for. All government has to decide is how it is going to generate the power to make all these new plug-in electrical vehicles run.

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