7:04 am, October 19, 2022
BMW boss Oliver Zipse thinks the government has caused ‘self-inflicted’ wounds to the UK car industry by moving too fast with its EV ambitions.
The chairman of the board of management for BMW issued a warning to ministers that plans to ban sales of combustion-engined cars by 2030 were too soon.
In an interview with Car Dealer at the launch of the new electric BMW i7, Zipse said the government’s decision will hurt the car industry supply network as the car market and UK production shrinks.
He said: ‘I am warning the British government that it’s too early to end the combustion engine.
‘It will lead to a shrinking of the industry and [suppliers will] leave the island.
‘This is completely self-inflicted, that’s my take.
‘To have a country without charging infrastructure, to think you can do only electric cars, is a dangerous thing.’
Home of the Mini
However, the BMW boss committed to UK manufacturing and said Oxford will continue to be the ‘home of Mini’ in the future.
The comments came just a few days after the car manufacturer revealed production of the electric Mini will move from the UK to China.
Despite this blow, Zipse – a former plant manager at Mini’s Cowley factory – said BMW’s commitment to the UK ‘remains the same’.
‘Nothing is changing,’ he said.
‘Oxford will stay the home of Mini. Hams Hall will produce combustion engines for the world for quite a long time, and Goodwood is being expanded, so actually nothing has really changed.
‘But of course we have product cycles that go up and down, but Cowley stays the home of Mini.’
Mini is set to become a fully electric brand by 2030. While it was not confirmed that production of electric Minis will also continue at Oxford at that point, a BMW spokesman said it is committed to ‘Oxford being Mini’s home’.
Zipse added: ‘Why would things change? We have the workforce we need, the next generation of Minis is about to be launched and we have a completely intact supply network there.
‘There were no changes after Brexit, we adapted to it and we continue to do so.’
Agency sales
Zipse also spoke about the importance of car dealers in a future of agency sales for the brand.
‘I don’t know any concepts where you can forfeit dealerships,’ said Zipse.
‘There’s thousands of dealers worldwide. It would be suicide if you started doing that yourself.’
However, Zipse said it was crucial that car manufacturers regained control of pricing and agency sales would allow BMW to do that.
He said: ‘I think the car industry has been the only one who didn’t have absolute price control.
‘I don’t know of any other business who does not have absolute price control, at least not for high-value goods.
‘The auto industry was the only one where dealers against dealers were fighting about prices – the same brand, same people – so there was some self-correction necessary.’
Zipse said BMW dealers will act as agents in the future, being paid a ‘profitable margin’ that is fixed for each car sale.
‘Of course, that is incentivised, if he does more of it,’ he added.
‘And if the dealer thinks that it’s a profitable arrangement, which works in many, many other industries very well, I think we have a very good chance to regain the data from customers and the power for pricing.
‘But that is not the OEMs doing retail. That’s not what it is. The last retail arm will always be a dealer, of course.’
