BMW Chairman Bernd Pischetsrieder won many new sports-car fans last year with the announcement that the famed German builder of luxury sports cars was buying troubled British automaker Rover.
The $2.5 billion acquisition meant not only a secure future for such prized specialty models as the Range Rover, but also a revival of such storied British badges as MG, Triumph, Austin and Riley, the rights to which Rover owns.
He was interviewed in Detroit by free-lance writers Anita Lienert and Paul Lienert.
Q-You have often referred to brand sensitivity in your speeches and you’ve said you have to maintain the BMW mentality and the Rover mentality so the “corporate cultures don’t get destroyed.” Is that putting it too strongly?
A-No, no. That’s exactly it. You cannot maintain, at least in the long term, a brand identity if the corporate culture doesn’t comply with that, because the culture is always to be carried by people and not machinery. Therefore, the most important issue is that your corporate culture and your brand identity must comply and you cannot therefore bring a BMW car into Rover because then this will not be a new BMW, which we don’t need anyway, and it won’t be Rover anymore. We have to keep the two cultures and the two companies separate.
Q-If BMW were to do, for instance, a 4WD vehicle, how would it be different from a Land Rover utility vehicle?
A-Well, the Land Rover, they always say, is a rocket car, a car that climbs vertical walls and has a road-holding on the freeway which doesn’t match a passenger car. The one is a consequence of the other. And where every other 4X4 gets stuck, the Land Rover won’t. If there would be such a thing like a BMW type of 4X4, it would possibly get stuck in the mud, but it would be driving like a BMW on the road. So, it’s quite clear that in each and every segment of the market-and the segments we’re not in-there is room for a BMW type of car and in a lot of segments, there is no such type of thing.
There is possibly a theoretical market for a BMW-type of mini-van. Now the question of brand comes into the picture.
Q-But it makes more sense to do a BMW sport-utility?
A-Our dealers here think it does. And for the dealers, you should ask, there is certainly a possibility for such a product. But for the time being, there is no doubt about what we have to do on the Rover side. It has a higher priority.
Q-Can you talk about the Rover brand a little bit more for North America? Do some of those great names like MG and Austin-Healey-magical names-still mean something to North American customers?
A-First of all, the previous shareholders of Rover didn’t think at all internationally. This way of thinking very much influenced the managerial decisions. Therefore, the question whether there is a market for the Rover brand name or MG or Triumph, wasn’t of any interest to them. Nevertheless, there is a great opportunity for names like MG and Healeys.
Now, I’m absolutely sure that there is a market for such cars, cars that comply with the original, genuine image of an MG and an Austin Healey. Not just any cars badged MG or Austin Healey. There is a market for those cars in the United States.
The difficult question obviously is what role does a BMW roadster now play as compared to an MG or an Austin Healey? This is a question I cannot answer yet because we possibly would have, with the takeover of Rover three years earlier, decided that the car would not be the same car, couldn’t be the same car. We could have possibly said `This is an Austin Healey.’
Q-We’re not likely in North America to see the MG or the Austin Healey names before the end of this decade.
A-I think that’s a fair assumption, yes.
Q-(With the production on the BWN roadster in Spartanburg, S.C.) You talked about how you don’t want the perception of U.S. BMWs, but BMWs. It seems to me the concern wouldn’t necessarily be with American customers but the perception of BMW customers in Europe and Japan, especially this roadster made in America. American products don’t enjoy the best reputation in overseas markets.
A-I know first-hand the reaction of potential Japanese customers was when they learned that by contract with the government, they have to buy American products now. To me, it is utterly wrong idea that by a contract you force an individual to buy a product which he likes or doesn’t like. Because in the moment you sign such a contract, you admit that the customer wouldn’t volunteer to buy the product. As long as we’re living in a free-market economy, one cannot deal with such a problem in that way. And the Japanese reaction-I was just by coincidence in Japan when that happened-and everybody in Japan said, `This just confirms that the product they try to sell us is something that is not saleable with us.’
Q-Does that apply to American-made BMWs?
A-We have to fight this sort of prejudice. I have no indication whatsoever that there is such a concern in Japan. But I think it is important for the American market. We cannot say this is a particularly desirable BMW because it’s either made in Germany or in South Carolina or in South Africa. It is a BMW. So I would equally dislike people saying I want to have a car manufactured in Spartanburg rather than Munich. If he has other reasons-he wants a BMW manufactured by his uncle in Spartanburg, that’s a different thing.
Q-I think I know what you can expect from a BMW, but I’m not sure what to expect from a Rover. Is that a typical American problem?
A-This is a worldwide problem because people don’t know what to expect from a Rover car outside of the UK. I don’t regard this as a disadvantage, because it gives us the opportunity to create a brand image for Rover that is in line with its thinking. Having a different position from a BMW product there is due to cars like the Jaguar, a perception as to what a British car is. And to get this in a technically modern solution in the market segments we will conquest with Rover cars, should not be that difficult because there is a public knowledge as to what they can expect from a British car.
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Q-What’s it going to be?
A-A Rover 600, for example, should be a smaller version of a Jaguar.
Q-But Rover also extends down to the smallest segment with the Rover 100. That’s a segment BMW would never think of entering?
A-Not with the BMW brand name. But the mini is such a unique product that we will always maintain that. We almost became a great name as such because nobody knows that mini is part of Rover. Not even in Europe. People say a mini is a mini. The point is just to see how we’re changing the direction of the company. The mini was always a mini. They wanted to call it a Rover mini but that’s the wrong concept. A mini is a mini and not a Rover. It’s a brand name.
Q-Have you smoothed out some of the ruffled feathers and the politics from a German company acquiring a British company?
A-We only had a positive reaction and not the negative one reported in the press. What everybody sees is that we’re investing a lot of money into new product. We are creating jobs in the UK and the company has a better future than ever. This perception of a company being owned by another company abroad is a concept of the past. Every British citizen can buy shares of BMW and to me, the most important thing, I can see in terms of negative reaction is if we changed the character of the product. But this is not what we want because of other reasons, logical business reasons. This was understood by everybody.
Q-You don’t think German business leaders need to have any special sensitivities, especially dealing in global markets?
A-That’s not what I said. You certainly need sensitivity towards local culture. There’s an old saying, `When in Rome, do as the Romans do.’ It’s very applicable. German companies or management certainly sometimes made the mistake of trying to put German culture into other companies in other countries, which is wrong. You need the sensitivity.
Q-I think it’s fascinating that your director of design is a young American.
A-Yes, he is. From Wisconsin.
Q-Now I would think having a guy like Chris Bangle at the head of your design, it would even throw more confusion into your design department.
A-No, style has nothing to do with Americans.
Q-You mentioned new global markets. What market segments do you want to see the BMW brand get into that you’re not into now?
A-None.
DOES BMW PLUS MG EQUAL A HIT?
What do you get when you combine the cash of BMW with the mystique of the MG label?
A hit, or so hope BMW and Britain’s Rover Group, which wowed the Geneva International Motor Show with a slick green MG F roadster, the first model to wear that storied badge in 15 years and the first all-new product from the British carmaker’s stable since the MG B was launched in 1963.
But they’re looking for a hit in Europe, because the snappy two-seater will not be seen on American roads, according to BMW Chairman Bernd Pischetsrieder.
Rover’s previous owner, British Aerospace, “didn’t think internationally,” said Pischetsrieder in an exclusive interview. So, the new MG roadster, which will retail for around $25,000 in Britain, “was not designed for the U.S. market, and therefore will not be on the U.S. market, in line with the previous thinking.”
But Pischetsrieder said BMW plans to bring the MG marque and companion brands, including Triumph and Austin-Healey, back to the U.S. after the turn of the century.
“I’m absolutely sure there is a market for such cars here in the United States-cars that comply with the original, genuine image of MG and Austin-Healey, not just any car with that badge,” he said.
The problem, said Pischetsrieder, is where the upcoming BMW Z3 roadster from South Carolina will be positioned. That car, he added, might have worn a different badge if BMW had acquired Rover three years earlier.
“We possibly would have decided that the car manufactured in Spartanburg would have a different character and would be an Austin-Healey,” Pischetsrieder said. “It obviously would not be the same car.
“But that was yesterday. What we do with those brand names in the future very much depends on how we position the BMW roadster in the market in the United States.”
Pischetsrieder hinted that the BMW roadster may be publicly unveiled in January at the North American International Auto Show in Detroit. Fitted with a 2-liter, 150-horsepower, 4-cylinder engine, the BMW Z3 (its unofficial name) will debut early next year for less than $30,000.