BMW's build-to-order program is ahead of schedule, says Michael Ganal, board member responsible for marketing and sales.
This year, BMW aims to cut the delivery time for custom-ordered cars in Europe from 30 days to 12 days. The company says it will reach its target of 10 days 'within a few years.'
BMW's online ordering program is being connected with each of its factories worldwide. The program, introduced in Germany in April 1998, enables a dealer to give a customer a proposed new-car delivery date and time within seconds.
The system connects a customer order with an existing painted body, which helps speed the production process. Ganal talked about BMW's build-to-order plans and other matters with Staff Reporter Luca Ciferri.
How is your build-to-order program proceeding?
We are ahead of schedule. In 2000, still in the rollout phase, we reached 80 percent of custom orders in the United Kingdom and 60 percent to 70 percent in the rest of Europe. Overseas markets such as North America and Japan take a much lower percentage of build-to-order vehicles. They work more out of dealer stock because of the long transportation times.
Your online ordering system will arrive in the United States this year, three years after it began it Europe. Why the delay?
Build-to-order is not as hot in the United States as it is in Europe. That's partly due to customers' attitudes. American buyers prefer to choose their new cars from dealer lots. But it's also due to unfamiliarity with the build-to-order system.
To my knowledge, the local American carmakers have never offered build-to-order as an option.
In our U.S. plant at Spartanburg, South Carolina, almost every X5 sport-utility we make there is built to order. Demand there is still higher than production.
American buyers must wait about three months for delivery of an X5. European buyers have to wait nearly six months. Aren't these waiting lists far too long?
Yes, they are long, so we have doubled the 2001 output of X5s to 90,000 units from the 45,000 built last year. But we won't add more capacity, nor will we build the X5 in another European plant.
We are very pleased that our new vehicle has been received so enthusiastically, but BMW's approach is not to follow the peak of demand after a new vehicle's introduction. We aim to have an output aligned with the market requests for an entire life cycle.
Late last year, BMW said it was talking to Magna International about subcontracting production of the forthcoming X3 small sport-utility. How are these talks proceeding? Do you have alternative plans?
We are only talking with Magna, with the view of having the X3 built in their plant at Graz, Austria. Things are proceeding well, but it is too soon to make any announcement.
If Magna builds the X3, it will become the first BMW not to be built by BMW.
No, it will become the first vehicle not to be built by BMW. In the past, we subcontracted production of a couple of motorcycles to Aprilia of Italy, while Carrozzeria Bertone is building our C1 motorcycle.
We are very pleased with the results, so I do not see anything wrong with subcontracting production of an entire vehicle.
There have been many doubts about Tritec, your joint venture with DaimlerChrysler for gasoline engine production in Latin America. Can you say anything about that?
I do not see any clouds on the horizon. We will use Tritec engines for our new Mini and everything is proceeding smoothly as far as BMW is concerned.
U.S. government regulators may review their approach to diesels. Is BMW ready to offer diesel cars in the United States?
Yes, we are, but we'll only start when the market asks for them. Unfortunately, I do not see any sign of a change of mind by U.S. customers on the diesel side at the moment.