BMW's Krueger: Automaker is innovator in mobility

LOS ANGELES -- Harald Krueger, CEO of BMW AG, is waging a technology race to establish supremacy with electric and autonomous vehicles.

BMW's Number One > Next strategy that will take it through 2025 is shifting its culture and pushing the automaker into new areas. These include artificial intelligence, self-driving cars and an increased number of plug-in and electric models.

Here this month, at the last of BMW's four events celebrating its 100-year anniversary, Krueger underlined that "our company has always driven progress in the industry through its technical innovations."

"Now, a new era of individual mobility is about to begin."

Krueger, 51, who became CEO in May 2015, said the four key elements of BMW's new strategy are: automated, connected, electrified and shared.

"In the past decade, we have evolved from being the leading premium car company to the leading provider of premium mobility and services," Krueger said. "Now, we aim to become the leading tech company and innovation driver in the field of mobility."

He has forecast that plug-in hybrids and EVs across the BMW brands, which include Mini and motorcycles, could account for up to 25 percent of the automaker's sales in the coming 10 years. BMW already has the i3 electric and seven electrified models and expects to sell a combined 60,000 electrified units globally this year.

In Los Angeles, Krueger discussed a Mini EV due in 2019 and the electric BMW X3 in 2020. In 2018, a roadster version of the i8 plug-in hybrid will go on sale.

"The next milestone will be the BMW iNext in 2021 -- our new spearhead of innovation," he said. "This car will underscore our strong claim to leadership in high-automated and autonomous driving."

Krueger underlined the automaker's commitment to the U.S. but wouldn't say whether its factory in Spartanburg, S.C., can grow further. After an expansion is completed this year, the factory will have a 450,000-vehicle annual capacity.

Krueger, who joined BMW in 1992 as a trainee, was project engineer for plant assembly in Spartanburg from 1993 to 1995. He moved up through the ranks and his last job before becoming CEO was board member for production. He was interviewed by Staff Reporter Diana T. Kurylko.

Q: How does BMW move from a performance brand to digital and artificial intelligence, especially in autonomous vehicles?

A: It comes with innovation and technology and moving people and culture -- the right strategy and the right culture and change.

Will BMW offer electric and hybrid powertrains across the entire range?

The next pinnacle will be with the Mini electric in 2019 and the X3 in 2020. We will offer more electric motorcycles, and we will have more electrified vehicles.

How will the i range expand, and what does BMW envision for the iNext car -- the electric and autonomous car shown as a concept at the first BMW 100 event in Munich -- in 2021?

The iNext will be, one, the next-generation electric drivetrains; secondly, the interior of the future; thirdly, autonomous driving; and fourth is connectivity of the future. These are the four main pillars for the BMW iNext, because when the iNext is on the market, it will not be enough, in my view, that you just have an electric drivetrain.

You need to have autonomous driving available. And if you drive with an automobile that is highly automated, you need a new interior and feature connectivity because you may want to watch a movie during driving. This is why these four things go hand in hand.

BMW can't do it alone. Will it have to enter into more partnerships?

We have set up a partnership with Intel and Mobileye, which we announced on July 1. It is our core cooperation -- an open platform for autonomous driving, and the things we will develop there will be open for other partners to join the platform.

On this topic, it would be ideal if there is a standard for autonomous drive. Just assume you have one accident with one car, and somebody asks you the question, "BMW, do you have the best standard in the car or [does] Mercedes-Benz or Porsche or whatever?" And then somebody comes up, and we are a little behind. That would be very difficult. That cooperation is a core pillar.

Second, we have Nokia, where we are shareholders with Audi and Daimler with the digital maps, because without digital maps, you cannot do autonomous driving.

And thirdly, we are also cooperating with Toyota on fuel cell technology. We already have a good sense of cooperation.

How about internally -- is BMW switching to focus on digital and artificial intelligence? 

We already have, for example, a new research and development area where we are focusing only on autonomous driving. There are a lot of changes in the r&d department with my colleague Klaus Froehlich [board member for r&d], where we have set up new departments for future topics. We have special departments that hadn't existed before and process changes. We are recruiting people for artificial intelligence and people for machine running. 

This is new for BMW? 

It is new, and [we have] retraining, as well, and qualification programs. That has happened already; otherwise, we cannot execute the strategy. 

On the topic of autonomous driving, will it be permitted by most countries, including the United States, by 2021? Are there many more hurdles? 

The legal situation in each of the countries is quite different. It will be a marathon going across the different countries to have the proper regulations that suit us for the future. 

We will see the first regulations before 2020, but there are still so many open questions. Who is responsible? What is the company responsibility? What is the driver responsibility? Can you drive in the cities or only on the highways? 

Level 3 [partial autonomy] and Level 4 [full autonomy under certain conditions] and Level 5 [full autonomy] -- especially Level 4 and 5 -- require a lot of work still to be done. 

How much growth do you see for BMW in the U.S.? BMW will be down this year because of a lack of crossovers. Can this problem of availability be solved with the expansion of the Spartanburg plant? How much further can that factory be expanded? 

We need to further improve the range of X [crossover] models for the U.S. market. We are working on this one. Part of it is already through, and part of it will be coming in the next month. We are expanding the X1 capacity for U.S. supply, which is not coming from Spartanburg. It will now come from Nedcar [contract manufacturer in the Netherlands]. 

When will the additional X1 production be online? 

We will not comment on that yet. X1 will be coming from Europe, and more volume will come to the U.S. as well. X2 is not decided. 

What is the importance of the new Mexico factory for supplying the U.S.? Can BMW build more vehicles there and expand growth, similar to the massive expansions of the Spartanburg factory? 

The decision in Mexico is that we invest $1 billion. The plant will have a capacity of 150,000 units, and this will start in 2019. And, as is normal, BMW plants are flexible for the future. But currently, the clear step is 150,000 units. Then we will see how it goes.