BMW restarts production

Munich The BMW Group wants to radically reorganize its production structures. The blueprint for the restart will be the new plant in Hungary, which is scheduled to start production from 2025. Production manager Milan Nedjelkovic laid the cornerstone for the new location in Eastern Europe on Wednesday in Debrecen in eastern Hungary, an hour’s drive from the Ukrainian border.

“We have the opportunity to create a completely new production structure,” said BMW Board Member for Production Nedjelkovic. Compared to today’s plants, efficiency should be increased by 25 percent. The new production structure will then be adopted for the main plant in Munich and then rolled out to all BMW factories worldwide. In the new plant, BMW wants to reduce the number of work and production steps, focus more on electric cars and enable networked data exchange from suppliers to final assembly.

The German car manufacturer is investing more than one billion euros in Hungary, following its direct competitors Audi and Mercedes, which have been in Hungary for years with their plants in Györ and Kecskemét. The construction of the factory had been repeatedly postponed in recent years – also because BMW had to repeatedly revise its electrical strategy.

Since last spring, however, there has been clarity: From 2025, all new models are to be based on a new technical architecture that is still to be developed, the “New Class”.

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Unlike today’s BMW electric cars, which are primarily geared towards hybrid and combustion engines, the new class should be “uncompromisingly geared towards electromobility,” promises CEO Oliver Zipse. As a special highlight, the Munich-based company plans to operate the entire plant with renewable energies, primarily with solar technology.

Today’s production concepts are no longer competitive

Zipse is not the only German car manager who is turning his group’s production structure upside down. In March, VW decided to build a completely new factory for the Trinity project next to the main plant in Wolfsburg. In particular, CEO Herbert Diess had pushed for more efficient production in view of the new competition from Tesla.

>> Read about this: A look at the Gigafactory Grünheide – How to build Tesla a car every 45 seconds

“Trinity” should also break with all previous models in the VW Group and be fully geared towards electromobility and digitization. But just new cars are not enough. “Today’s production concepts will no longer be competitive for purely electric car models from 2025,” says Heiko Weber, production expert at the Munich strategy consultancy Berylls.

Volkswagen has therefore set itself the goal of reducing the production time for a car from the current 18 to ten hours. This cannot be done in the existing plants, which will continue to build cars with internal combustion engines until at least the end of the decade.

The German car manufacturers are facing a major challenge. Even in the noughties, they were the global standard for efficiency and flexibility in production, today Tesla sets the standard.

It starts with the planning: It’s been a good two years since Tesla announced the construction of a plant in Grünheide near Berlin – the first cars are now rolling off the assembly line. A project with considerable risks because important permits were missing until the very end. A legally and economically unthinkable approach for German board members, emphasize industry representatives.

Tesla planned product and production together

The uncompromising spirit continues with the product. Unlike BMW and Volkswagen, the Tesla models are purely geared towards electric drives and the factories only produce electric cars. “Tesla has designed its cars to be easy to build. That’s why the production of Tesla is also an indicator for the German manufacturers,” says Weber. “Tesla is software-driven, has digitized its production and is also why it is so efficient. German manufacturers still have potential here.”

The hunt to catch up has begun. The future models of the “New Class” and “Trinity” are closely intertwined with the orientation of the new factories. Since there are only electric drives, many work steps are no longer necessary. But that’s not enough: like Tesla, the new cars have to consist of fewer individual parts and more modules that are delivered ready-made.

>> Read about this: Why also Tesla and Mercedes have so far failed in fully autonomous driving

While Volkswagen and BMW will soon have a dozen model series with countless equipment variants, Tesla covers its product range with four models: the Model S, the Model X, the Model 3 and the Model Y. The complexity is no longer in the hardware, but in the software of the cars. One thing is certain: Volkswagen and BMW are also thinking hard about how they can streamline their complex product worlds with the transition to the new electric architectures.

BMW still lives well from the combustion engine

Until then, the complexity of the established car manufacturers will only increase. BMW is phasing out the production of the small electric car i3 in the summer, also because the complex carbon fiber construction never paid off.

With the recently introduced i4, however, BMW is taking its range of drives and types to the extreme. The electric car produced in the Munich plant rolls off the same assembly line as the conventional 3 Series sedan, which is available as a diesel, petrol and hybrid. The 7-series is now also being produced at the Dingolfing plant according to a similar principle.

Laying of the foundation stone in Debrecen

BMW Plant Manager Hans-Peter Kemser, BMW Production Director Milan Nedeljković, Hungarian Trade Minister Péter Szijjártó and László Papp, Mayor of Debrecen (from left to right).

(Photo: BMW)

The plant in Regensburg is currently preparing for the production of electric off-road vehicles. The BMW X1 and X2 are currently rolling off the assembly line here. The costs of the manufacturer’s technology-open strategy are already visible: The integration of the electric models into ongoing production causes additional costs of a hundred euros per car, analysts complain.

But the strategy is still paying off for BMW, because the demand for conventional cars is higher than it has been for a long time. Nine out of ten BMW cars still have a combustion or hybrid engine, and last year’s record profit of over 12 billion euros was generated primarily with petrol and diesel cars.

But the clock is ticking: by 2030, half of BMW’s sales of a good three million cars should be purely electric, also in order to be able to meet the EU’s climate requirements. Not only the new model factory in Debrecen can supply these quantities. By then at the latest, the German locations must also have adopted the new production structure of the “New Class”.

More: “Blackberry of the automotive industry” – BMW investors demand end date for combustion engines

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