Company CFO Helmut Panke, named last week to succeed Joachim Milberg as chairman of the management board next May, said the German luxury carmaker will be able to defy a downturn because its cars and light trucks are counter-cyclical.
“We have strong indications that we can maintain our momentum,” Panke said in an interview after Milberg’s surprise announcement that he will step down one year early. “We have our own economic cycle.”
The 58-year-old Milberg said in the same interview with AutomobilWoche, a German-language sister publication of Automotive News, that he was stepping down primarily because of acute back pain from a slipped disk. He will join BMW’s supervisory board in May.
“My contract is due to run out at the end of May 2003, and I wanted to leave at the top and avoid discussion about whether to extend it or not,” he said.
“I’ve also suffered from very bad back pain for over a year now. I’m somebody who is used to working at 120 percent of capacity, not 80 percent, so I decided after long discussions with my family to step down.”
The former university professor became CEO Feb. 5, 1999, after his predecessor, Bernd Pischetsrieder, was unable to stop the hemorrhaging at BMW’s Rover Cars subsidiary. By the time BMW got rid of it, the British carmaker was losing $2.8 million a day.
Premium cars in demandBMW posted a record profit of 1 billion euros last year, or about $890 million at current exchange rates, and is on track to top that this year.
Panke, 55, has been CFO since March 1999. He oversaw the transfer last year of the assets of Rover Cars to a group of British investors and the sale of the Land Rover sport-utility division to Ford Motor Co. for $2.7 billion. He ran BMW’s U.S. unit from 1993 to 1995.
Panke said he is confident BMW will sell more than 900,000 vehicles next year.
“The demand for premium cars is still growing. Forecasts predict that the premium segment will grow about 50 percent by 2010, twice as much as the volume market,” he said.
In the next six years, BMW plans to expand its line of Mini small cars; bring out a new Rolls-Royce luxury car, X3 small sport-utility and 1 series small car; and build an assembly plant in Leipzig, Germany.
Leaving on high noteThrough November, BMW’s worldwide sales are up 10 percent over last year’s record pace to 830,000 vehicles. U.S. sales in the same period are up 15.4 percent to 194,713 cars and trucks, putting the company within 7,000 units of overtaking Lexus Division as the No. 1 luxury brand.
Panke, a 20-year BMW veteran, was a high school exchange student at Phillips Exeter Academy in New Hampshire in 1964 and 1965 where, he says, he experienced “the best lessons in physics of my life.”
He later got a doctorate in physics at Munich University, taught there after doing nuclear research in Switzerland, and was a consultant with McKinsey & Co. before joining BMW.
Panke said he never thought he would be leading BMW some day: “Anyone who claims that it’s always been his life’s plan to become a member of the board isn’t telling the full truth.”