In an industry where automakers are growing by merger, alliance and takeover, BMW AG's chairman offered a word of advice Wednesday night to attendees to the Automotive News World Congress.
January 17, 2001
"We are now experiencing a phase where we think size does matter -- bigger is beautiful," he said. "We must ask ourselves, however, how long this phase will be seen as true."
Milberg suggested that a company that retains its independence, like BMW, can achieve greater success.
He pointed to BMW's approach of gaining premium returns from premium products as its ideal path to success. He cautioned that this philosophy wasn't necessarily a good approach for all automakers.
"Each company must define its own strategy and follow it in a consistent fashion," Milberg said.
He said BMW has tried other approaches, such as exclusive dedication to mass production and mixing volume and premium products, but neither has worked.
So now, Milberg said, BMW expects premium returns from all its products.
Even BMW's least expensive vehicle, the new Mini, which will sell for about $18,000 in the United States, follows this approach, Milberg said. He said the Mini will not be produced and sold at the expense of the company's higher-line products. Instead, BMW will use the vehicle to attract entry-level buyers to the BMW family.