Jakarta Globe – Bloomberg, Christoph Rauwald, October 15, 2013
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Sporty, chic and futuristic: the i3 tanks up
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BMW, the world’s
biggest maker of luxury vehicles, will have to increase investment in
electric-car production if demand for the new i3 model continues in line with
initial orders.
Customers
have reserved more than 8,000 of the battery-powered i3, which will cost $41,350
in the US, even before the car hits showrooms in Europe next month, Chief
Financial Officer Friedrich Eichiner said yesterday in Amsterdam.
BMW expects
to sell more than 10,000 of the four-person car next year and “will adjust
capacity according to demand,” he said at a press conference. “If demand holds,
which is what it’s looking like, we will soon have to invest more.”
The maker
of BMW, Mini and Rolls-Royce vehicles is upgrading its lineup with the i3, the
new 4-Series coupe and a revamp of the X5 sport-utility vehicle to maintain its
sales lead over Volkswagen’s Audi and Daimler’s Mercedes-Benz. Both competitors
have vowed to surpass Munich-based BMW in deliveries by the end of the decade.
The i3 will
go on sale in Germany for 34,950 euros ($47,440) on Nov. 16, followed by the
US, China and Japan in the first half of next year. The model made its public
debut July 29 at simultaneous events in New York, London and Beijing. The push
to sell the electric car and recoup investments in the technology underpinning
the vehicle include an international print, TV and Internet advertising
campaign.
Margin
Targets
The
spending on development of new models and expanding production capacity caused
the operating profit margin at BMW’s auto division to narrow to 9.6 percent in
the second quarter from 11.6 percent a year earlier.
“We’ll have
to work very hard to keep profitability within our target corridor” of 8
percent to 10 percent in the coming years because of large investments required
to meet stricter emissions regulations and the weak car market in Europe,
Eichiner said yesterday.
Sales gains
in China and the US have helped BMW cushion the effects of the sovereign-debt
crisis on Europe’s car market, which is sliding to a 20-year low. BMW, which
doesn’t anticipate a recovery in demand in its home region before the second
half of 2014, expects deliveries to rise this year for its third straight
annual sales record.
“Demand in
China and North America continues to be strong,” Eichiner said. “It makes sense
for us to think about expanding production capacity in North America,” with the
U.S. and Mexico both options, he said.
The rollout
of the i3 will go ahead as planned next month and won’t be impacted by issues
that typically affect the ramp up of a new model, he said. The executive was
responding to a report by Wirtschaftswoche over the weekend that problems
bonding carbon-fiber components for the car led to a 10-day production halt.
Bloomberg
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