March 20, 2013 R&D: FUTURE-PROOFING THE BMW GROUP. DR. HERBERT DIESS MEMBER OF THE BOARD OF MANAGEMENT OF BMW AG, DEVELOPMENT
OVERVIEW. 1 Challenges in the automotive industry 2 Our solutions Evolution and revolution Managing growth & profitability: Process chains, architecture, modular systems 3 Summary Dr. Herbert Diess, March 20, 2013 Page 2
OVERVIEW. 1 Challenges in the automotive industry 2 Our solutions Evolution and revolution Managing growth & profitability: Process chains, architecture, modular systems 3 Summary Dr. Herbert Diess, March 20, 2013 Page 3
GLOBAL TRENDS IMPACT ON PERSONAL MOBILITY. R&D MUST DELIVER NEW SOLUTIONS. Environment Climate change and its knock-on effects Urbanisation By 2030, over 60% of the world s population will live in cities Customer Expectations Changing values DRIVING FACTORS Economics Dwindling resources, rising fossil fuel prices Culture Sustainable mobility as part of a modern urban lifestyle; taking social responsibility Politics and Regulations CO 2 and fleet regulations, import restrictions Dr. Herbert Diess, March 20, 2013 Page 4
COMPARISON OF CO 2 FLEET REDUCTIONS IN EUROPE. BMW GROUP HAS ALREADY ACHIEVED A GREAT DEAL. TOUGH TARGETS TO COME. BMW Group has more than fulfilled its contribution to the ACEA commitment to reduce fuel consumption by 25 % from 1995 to 2008. EU 250 fleet emissions (g CO 2 /km) BMW Group 200-30% 150 ACEA 2011: 145g/km 100 2011: 136g/km 2015 = 130 g/km* 2020 = 95 g/km* 50 EU COM target = Ø fleet emissions (EU-27) 0 *Manufacturers get individual targets, which may be above or below the value of the Ø EU Com fleet emissions, depending of their individual Ø weight. 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Dr. Herbert Diess, March 20, 2013 BMW Group ACEA Page 5
OVERVIEW. 1 Challenges in the automotive industry 2 Our solutions Evolution and revolution Managing growth & profitability: Process chains, architecture, modular systems 3 Summary Dr. Herbert Diess, March 20, 2013 Page 6
OUR DUAL-TRACK APPROACH SETS A CLEAR DIRECTION FOR R&D. Evolution Efficient combustion engines EFFICIENT DYNAMICS/MINIMALISM Innovative technologies Revolution Alternative drivetrains Mobility services Innovative materials and processes Dr. Herbert Diess, March 20, 2013 Page 7
PURPOSE-BUILT DESIGN THE BMW i LIFEDRIVE CONCEPT. BMW dynamic driving performance Vision: Clean production Optimized integration of electric drive system Visionary design language Innovative key technologies: CFRP & electric motor BMW i Free forms in interior and exterior design Easy to update with changing technologies Social sustainability Customer-friendly e-mobility concepts Integrated high-voltage component safety concept Dr. Herbert Diess, March 20, 2013 Page 8
OVERVIEW. 1 Challenges in the automotive industry 2 Our solutions Evolution and revolution Managing growth & profitability: Process chains, architecture, modular systems 3 Summary Dr. Herbert Diess, March 20, 2013 Page 11
OUR GOAL: TO MANAGE A THREE-TIMES LARGER PORTFOLIO WITH RESOURCES THAT HAVE NOT INCREASED PROPORTIONATELY. 2005 2015 2020 Without a Modular Strategy, a three-fold increase in model numbers would send costs and resources spiralling along the process chain. The Modular Strategy enables shorter development cycles and enhanced flexibility in our plants. Dr. Herbert Diess, March 20, 2013 Page 12
THE MODULAR STRATEGY IS THE ENABLER FOR THE EXPANSION OF THE BMW GROUP MODEL RANGE. Underbody e.g.: Front seat attachments Architectures Modular product Modular front seat Common elements e.g.: Structure Head restraint Modular system Front seat attachment e.g.: Standardised seat installation process Shorter development time Shorter time to market Lower investment costs Lower manufacturing costs Lower development costs Lower fixed costs Dr. Herbert Diess, March 20, 2013 Page 16
30-40 % THE NEW BMW EFFICIENTDYNAMICS ENGINE FAMILY HIGH LEVELS OF COMMONALITY BETWEEN AND WITHIN DIESEL AND GASOLINE ENGINES. Cylinders (inline) -3-4 -6 Gasoline >60 % Common parts shared within gasoline or diesel engines are approx. 60%. Between the gasoline and diesel engines there is a 40% sharing. Diesel >60 % Dr. Herbert Diess, March 20, 2013 Page 17
COMMON ARCHITECTURE, NOT PLATFORMS. IN PREMIUM VEHICLES DIFFERENTIATION IS KEY. BMW Group architecture = 3 core areas. Engine compartment Drivetrain Rear BMW Group architectures allow maximum differentiation between models in terms of design and dimensions and account for about 70% of all production cost. Dr. Herbert Diess, March 20, 2013 Page 18
Process Chains Product Lines PROCESS CHAINS PROVIDE EFFICIENT PRODUCT DEVELOPMENT PROJECTS. BMW i MINI X Series 7 Series 6 Series 5 Series 4 Series 3 Series 1 Series Body and Interior Trim Electrics/Electronics R&D Sourcing Driving Dynamics Powertrain Manufacturing Process chains bundle development-, purchasing- and manufacturing-skills and deliver faster and better solutions for product variety Modules & standards for all products Best practice solutions for all products Acceleration of decision-making and processes Dr. Herbert Diess, March 20, 2013 Page 19
ECONOMIES OF SCALE ACHIEVED THROUGH MODULAR SYSTEMS AND COMPLEXITY MANAGEMENT ALMOST ON PAR WITH VOLUME MANUFACTURERS. Vehicle volumes Number of variants Part numbers of all variants (products) 2009 2010 2011 2012 2013 2014 2015 Product complexity: Part numbers/variant Dr. Herbert Diess, March 20, 2013 Page 20
OVERVIEW. 1 Challenges in the automotive industry 2 Our solutions Evolution and revolution Managing growth & profitability: Process chains, architecture, modular systems 3 Summary Dr. Herbert Diess, March 20, 2013 Page 21
SUMMARY. CHALLENGES APPROACHES OBJECTIVES Manage growth and complexity Achieve CO 2 and emissions targets Manage variety of new technologies Optimization of process chain management Architectures Product and process modules Electro mobility Efficiency in R&D, purchasing and production Profitable growth Further technological leadership Dr. Herbert Diess, March 20, 2013 Page 22