MUNICH – BMW will increase productivity at its car plants by 5 percent a year, production head Norbert Reithofer said.
The move is part of the German automaker’s drive to cut costs and improve efficiency in response to a slack market, weak US dollar and prices of rising raw materials.
To achieve greater productivity, BMW has:
The company achieves high capacity utilization by building at least two models in each of its plants. It then tries to arrange the life cycles of the models so that when one car suffers low demand, there is high demand for the other vehicle.
Lexus a benchmark
Reithofer said Toyota’s Lexus premium brand is BMW’s quality benchmark, not German rivals Mercedes-Benz or Audi.
BMW’s ambition is to overtake Lexus in key surveys that rate the quality of automakers’ cars.
“We are ambitious enough to set ourselves the goal of being the best,” Reithofer said.
BMW will gauge its progress based on its results in J.D. Power and Associates’ surveys and feedback from its global dealer network.
In last year’s J.D. Power vehicle dependability survey in the US, Lexus was the highest-ranked brand for the 10th straight year. BMW, the best-ranked European brand in that survey, took the fifth spot overall.
“Our speed of innovation is already better than Toyota’s,” Reithofer said. “I doubt that Toyota could offer the complex, individually-tailored vehicles that we offer with the level of quality that we have.”
Reithofer said that it was possible that contract coachbuilder Magna Steyr, which produces the X3 SUV for BMW in Graz, Austria, could receive more contracts.
He expects BMW’s new Leipzig plant in Germany to build almost 50,000 3-series models this year. Production started at the E1.3 billion plant on March 1.
Asked when BMW would begin building the 1 series in Leipzig, Reithofer replied: “I will only say this: The current 1 series, which is built at Regensburg, will not go to Leipzig.”
Reithofer confirmed that BMW is looking for a production location in India.
“Our scouts are out there,” he said. “However, at first there will only be a [complete knockdown] assembly plant.”
BMW is increasing capacity for the Mini because of consistently high demand.
Reithofer said existing capacity at the Oxford, England, plant will be increased about 20 percent by 2007. BMW built 190,000 Minis in Oxford in 2004.
He said: “We will eliminate production bottlenecks within body manufacturing and in the paint shop.”