While other auto manufacturers are retrenching, repositioning or re-inventing, one venerable brand is holding its ground and simply restyling. BMW of the future looks to be a lot like BMW of the past. It will be interesting to see how much share remains for the high-end brands in a contracted market where consumers have learned some hard lessons about excess and fiscal sensibility.
Consumer behavior has changed and will not be the same, even as the economy recovers—something 
business will have to adapt to as it vies for a piece of the smaller pie. It’s analogous to the consumer correction that occurred in the post-depression generation, which brought a renewed respect for the value of a dollar, for saving money, paying off the car and driving it into the ground. An aging Boomer generation, most of which has been living well over an extended period of prosperity with easy credit to buy things we really couldn’t afford — like big homes and a new car every three years — is now faced with the realities of post-recession contraction, a reduced labor force, depleted 401k plans, devalued real estate holdings and too much debt.
This contraction in spending power within the massive U.S. Boomer population will probably continue over the next 20 years or so as the bulge moves closer to retirement, with more conservative fiscal priorities: less debt and more catch-up savings, fewer extravagancies. Not only will the market be smaller for the BMWs of the world, but product life-cycles will be extended as owners keep their cars longer, with more buyers looking for used car value.
At BMW the strategy appears to be: protect the brand by continuing to focus on style and performance, rather than economies. A great new design is the way to stimulate consumer interest. And who is going to lead BMW into the headwinds of these difficult times? None other than the vaunted Dutchman, Adrian van Hooydonk.
He’s not a business leader or a marketing guy. He’s the new design chief who will define the look of BMW to come. In 2001 van Hooydonk took the helm at Designworks USA in California where he gained considerable acclaim before being called back to the mother ship to head up the Brand Design Studio under the tutelage of Chris Bangle (credited with the legendary “Bangle Butt”). When he retired earlier this year, van Hooydonk took the driver’s seat.
He says he’s going to build the car of the future, represented by concept models like the Z10 ED (EfficientDynamics fuel saving technologies) which promises 400 horsepower and a fuel savings of up to 15%. Wow. (The Z9 got a combined 15 mpg.). I guess the future does look a lot like the past at BMW. But even in a competitive, contracted marketplace, they’ve got the secret weapon.
“Beauty is in the eye of the beholder,” van Hooydonk says. “You must decide how many eyes you’re trying to please.”
Pleasing eyes is one thing, Adrian. Getting people to buy is altogether another. This guy better be good.
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I think that Hooydonk guy is right. Every BMW owner I know didn’t get it because of fuel economy. It’s a status statement above all. And if BMW will start making “green” cars it will be the end of it. They may mention the fuel economy in the ad here and there for PR purposes but they will keep making expensive luxury cars regardless of the state of economy. Remember VW Phaeton?when Volkswagen decided to do a luxury sedan. That didn’t work, How many people are aware of Huyndai Azera? These are fine cars but they do not have the same “weight” behind them. BMW may introduce the budget 100 series for frugal drivers but I am afraid they will loose part of their identity with it.
Comment by Alex August 25, 2009 @ 2:21 pm