BMW's Proposals For A Fourth Brand

BMW: We may need a 'green' brand
By Diana T. Kurylko, Automotive News Europe 21st January, 2008

The new US fuel economy standards are squeezing BMW so tightly that it might create a fourth brand to sell ecologically friendly cars. BMW must find a way to satisfy growing pressure for vehicles with lower emissions and better fuel economy, says Stefan Krause, BMW AG's board member for sales and marketing.

But it must do so without distorting the images of its existing three brands, BMW, Rolls-Royce and MINI. A new green brand could include front-drive cars and crossovers that would not easily mesh with the BMW brand's rear-drive lineup. Despite its fuel cell research and lineup of sophisticated diesel engines, the company has concluded that the BMW brand should not be stretched too far.

'We cannot take the blue out of BMW and change it to green,' said Krause. 'Maybe we could add a fourth brand.' In an interview last week with Automotive News, Krause said his company has rejected three green options:

1. Transforming MINI. The brand's lineup of small cars have good fuel economy, but BMW doesn't want to risk diluting MINI's quirky appeal by adding too many models. And although Mini offers a diesel engine in Europe, vehicles with that powerplant can't be sold in the United States because they don't meet California emission standards.

2. Buying another brand. BMW evaluated several brands — including Saab and Volvo — but concluded that none of them meets its needs.

3. Reviving a British brand. BMW has shelved proposals to bring back one of the British brand names it owns, such as Riley or Triumph.

Despite talk of starting a green brand, BMW executives are unsure how badly their customers want fuel-sipping vehicles. 'People go to cocktail parties and talk about being green and then drive home in their M6s,' Krause said. BMW went public with its deliberations last September, when CEO Norbert Reithofer unveiled his corporate strategy through 2020. Reithofer's longterm plans included a possible fourth brand.

At the Frankfurt auto show, Reithofer admitted that he and two other executives have been dubbed the 'greenies' on the company's six-member management board. Since then, BMW has been mum on the subject — until last week, when Krause spoke with Automotive News.

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