For decades, BMW has advertised its vehicles as “the ultimate driving machine.” The meaning of that phrase has started to slip. In an age of connected technology, ultimate driving machines automatically brake for their passengers in emergencies or beam content from mobile phones and tablets as much as they may accelerate quickly or handle nimbly.
That puts BMW, the world’s top-selling premium automaker by sales volume, in a difficult position. It must maintain its reputation for driving dynamics while also catering to changing consumer tastes—like better fuel efficiency and more advanced technology. And it is trying to do so with competitors like Audi and Mercedes-Benz nipping at its heals. Brands ranging from Toyota to Hyundai are also trying to sell more premium vehicles.
Last year, worldwide BMW sales rose 9.5% to 1.81 million cars, while Mercedes-Benz deliveries jumped 13% to 1.65 million vehicles. Volkswagen-owned Audi posted an 11% increase to 1.74 million cars. Global demand for premium cars has rebounded as the U.S. economy recovered from the recession and consumers in developing economies, such as China, continued to buy high-end products.
Harald Krueger, who took over as CEO after the group’s annual shareholders’ meeting on May 13, is trying to continue expanding BMW’s lineup while maintaining its profitability. As part of a strategy, partly overseen by the 49-year-old executive since late-2007, BMW has been aiming to make 30% more vehicles with the same number of workers while trying to reduce production costs per vehicle by raising economies of scale in components, drive systems and modules. Now, Krueger must do the same as cars grow more complex and fuel-efficient.
One of BMW’s little-known assets lies about an hour north of Los Angeles, in Newbury Park, Calif. Designworks, a consultancy owned by the German giant, is charged with designing future vehicles, exploring emerging technologies and experimenting with new materials, such as carbon fiber a major—and costly—part of BMW’s strategy to make its cars more fuel efficient in the future. In this video series, TIME looks at how BMW is trying to deal with the difficulties of a ever-more crowded, ever-changing market.
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