Bmw wants to concentrate on quality and innovation in order to boost sales

Article by Christian Andrei, on July 18, 2011

BMW AG intends to increase its purchasing for components to complement its aim to boost its international unit sales from around 1.5 million in 2010 to 2 million by 2020.

In an interview with Automotive News Europe editor-in-chief Harald Hamprecht, Herbert Diess -- BMW management board member for purchasing -- revealed the company’s outlook on growing sales, electrification of vehicle, globalization and supplier consolidation.

Diess revealed that after achieving its goal to decrease purchasing costs by $5.5 billion quicker that expected, the company will now want to concentrate on quality and innovation.

To do this, the vehicles are differentiated from the competition, Diess disclosed, stating that their cars have the “best and most innovative parts, not the cheapest.” In addition, Diess stated that the company will employ additional quality engineers than purchasers, as part of the strategy. He emphasized that the company has quality that is at a “historically good level.” Also, the company’s warranty costs decreased further last year.

In 2010, the company’s annual purchasing volume was around 28 billion euros or $37 billion, which will increase according to Diess. He further said that the company wants to increase its sales to at least 2 million vehicle units by 2020, growing the purchasing volume in proportion to sales. Moreover, Diess revealed that the structure of the purchasing volume would change, as engines will require fewer cylinders and some commodities will be reduced.

However, the company will only be buying new kinds of materials because the industry is in the middle of a huge revolution, which is the electrification of the automobile.

With the new trends, the biggest change would be, according to Diess, is the fact that there are new suppliers. One of them is SB LiMotive, which will be the company’s exclusive lithium ion cells supplier for its i subbrand.

Topics: bmw, sales

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