A week ago my first blog in my new “Tech Metals Insider” series appeared on KITCO News, and I am being told that it did quite well. Phew. As you can read there I was invited to witness BMW’s launch of their new “i3” “Megacity” car in New York City. My KITCO blog is geared at the use of specialty metals in high tech applications, but of course an event like this has many more facets, one of which I would like to highlight in this blog. Don’t worry, not a blog on cars yet again, more a blog on how Germans approach markets more often than they should.
BMW, like many German companies, is strongly driven by engineers. And these two words, “German” and “engineers” in one sentence signify what was to be observed on the sidelines of the event. Here are a few examples:
- Designed to be a “Megacity” car, BMW’s executives touted the i3 repeatedly as the “ideal mode of transportation” in large cities. It is not. Public transportation is. New York also rolled out a bicycle program recently that appears to be very well accepted. It helps people move around quickly, and it decongests the roads.
- When Megacity people travel they rent a car, or use a car sharing service. Why pay parking fees for a car you don’t need?
- So the i3 really is a commuter car, not a city car. Totally different profile.
- When asked about a missing spare tire BMW’s executives explained that adding a spare tire would have added “dead weight” and so they decided to do without. “But we have addressed the issue”, was added at the end, and in a small voice. Inevitably, the reporter’s follow-up was: “oh ok, so the car has run-flat tires?” – “No, but we have addressed the issue” – uncomfortable silence. Eventually, we learned that “we addressed the issue” means “you can drive home and call roadside assistance”. No further details were given. This may work when you live downtown Manhattan but it sure doesn’t when you’re commuting (see above) and are left immobile in a dark side street (which happened to me in my electric car, albeit for different reasons). No roadside assistance in almost two hours until I abandoned my car.
- Part of this thinking is a “study” that proves most of their customers only drive about 40 miles per day. That study, of course, was conducted sampling the customers of BMW’s “ActiveE” program, a purpose built electric car geared solely at commuters, most of which own a second car for all the other things they’re doing. How empiric is that sample, I wonder?
The list could go on for a while but the point is made, and it is this: do you sell what you make or do you make what you sell? Engineers want to sell what they make. Marketers want to make what they sell. I am convinced BMW’s sustainability model is the way to go, it is bold, it is admirable, and it doesn’t deserve to fail. The i3 will have a tough time in the U.S. market, though, especially when Tesla follows up on their threat to offer a 200 mile car at $ 35,000 next year. Knowing who you want to sell to is incredibly important, and right now BMW are not on that path.
UPDATE: One of my readers points out that the Tesla “bluestar” won’t be out until 2017, and that the $35k price point is AFTER the $7,500 tax rebate. So the pre-discount price would be $42k. Sorry about that, I misread the press release.