SA is vital to BMW’s global strategy
Mark Smyth spoke to BMW board member Ian Robertson on the company’s game plan going forward
General Motors might not see any reason to remain in SA, but according to Ian Robertson, board member for sales and marketing at BMW, the opposite is true for the Munich-based company.
Chatting to him on the banks of Lake Como, it was clear that the company is as committed as ever to SA. On the subject of General Motors’ withdrawal from SA, Robertson says diplomatically: "That’s their strategy. We’re different."
Being different means investing billions of rand in the company’s plant at Rosslyn, which will switch in 2018 from producing the 3 Series sedan to manufacturing the X3 SUV.
"There are huge supply constraints on X models from Spartanburg," he says of the current X plant in the US. The plant is at full capacity, particularly with new models set to join the line-up, such as the X2 and luxury X7.
To alleviate pressure on the US plant and in view of the declining market for medium sedans worldwide, the decision was taken to move some X3 production to SA and China.
"We need a broader geographical footprint," he says, adding that SA was always a strong contender because there is an existing supply chain into the Rosslyn plant.
As a former boss of BMW SA and president of the National Association of Automobile Manufacturers SA, Robertson was instrumental in putting together the Motor Industry Development Programme. He is proud that SA has become a major exporter and that between himself and former cabinet ministers Alec Erwin and Trevor Manuel they, along with others, carved out a future industry.
He says SA still needs to be a bigger market but is confident that will happen eventually.
The X3 is one thing, but the Department of Trade and Industry has stated it was keen to see automotive manufacturers producing alternative power vehicles in the country, particularly electric vehicles.
Robertson says that is unlikely for BMW. In 2017 the company will produce 100,000 electric vehicles and he says production needs to be closer to the markets where demand is high. SA does not have the volume, but he says the country does need to develop its own market in this regard.
Robertson also says that without a battery industry, local production would be difficult because batteries do not travel well in the event that they have to be imported. There are those who hope to see SA become a centre for the fuel cell vehicle industry, but he says battery technology will advance faster than fuel cells due to the issues surrounding infrastructure. This is one of the reasons that BMW has partnered with Toyota on its fuel cell strategy.
BMW has been in the market for a long time, but what about more recent players, such as Tesla? "The industry has always had new players. They come and they go," he says.
BMW invested in the i3 and i8 electric vehicles, which was an expensive exercise. But it is already paying off, particularly as many rivals are three to four years away from producing their own solutions.
The next big thing is autonomous driving technology, which Robertson says is "more of a journey than a sprint". He says technology is advancing but it still has a long way to go and BMW will be at the leading edge of development.
One of the major hurdles is the vast amount of data involved. He points out that an Airbus A380 produces about 1.5TB of data per long-haul trip; a level 2 autonomous car produces a massive 4TB of data per day. All that needs to be analysed and all permutations assessed.
Assessing autonomous cars has recently been a major topic of discussion among legislators and governments, with German Chancellor Angela Merkel laying fundamental ground rules for the technology in her country.
"Legislators are just waking up to what is happening [with autonomous vehicles]," says Robertson. He expects there to be regional legislation rather than anything global but says the technology is going to move much faster than the legislators.
"Cars will become more human in their decisions," he says, "but humans make mistakes." It is this that has legislators worried and could seriously slow down the level of excitement over autonomous technology as people realise just how complicated the matter is.
Fortunately, whatever direction the industry takes, Robertson appears confident that SA will retain its place in it, at least as far as BMW is concerned.