BMW pins independence on increased market presence

BMW will retain its independence in the rapidly consolidating global car market by maintaining a presence in all the main automotive markets, Werner Samann, Rover chief executive and BMW board member, has claimed. Speaking at the launch of the Rover 25 and 45 – the upgraded 200 and 400 – he rejected the widely held […]

BMW will retain its independence in the rapidly consolidating global car market by maintaining a presence in all the main automotive markets, Werner Samann, Rover chief executive and BMW board member, has claimed.

Speaking at the launch of the Rover 25 and 45 – the upgraded 200 and 400 – he rejected the widely held idea that the number of cars produced was the most important criterion for remaining independent.

Many analysts have suggested BMW is too small to avoid being forced into an alliance, similar to Renault and Nissan or DaimlerChrysler, or swallowed up by a bigger company, as Volvo was by Ford.

`The optimum size of a company as the basis for its independence does not follow from the number of units alone,’ Samann said. `It depends on a whole range of criteria.’

He said these include having a presence in all the world’s main automotive markets; maintaining an adequate market share and turnover in each sector; offering an attractive range of models in all sectors as the basis for profitable growth; and maintaining `a level of corporate value so substantial that the company can no longer become the subject of speculation’.

The BMW group, Samann added, `has been fulfilling all these criteria for a long time’.

Samann said BMW sees Rover as essential to the strategy, because it gives it a presence in the lower-medium market without putting the BMW name on such cars, diluting the strength of the BMW marque.

`Rover will break even in 2002 and our factories will have competitive productivity levels,’ he concluded.

* BMW denied last week that its decision to increase its stake in aero engines group Rolls-Royce was a precursor to a full bid.

BMW spent £200m to raise its Rolls-Royce stake from 2% to 8%, part of a move to harmonise the structure of the aero-engines joint venture operated by the companies.

Under the terms of the agreement between the companies, the UK group is taking full control of the joint-venture company. In return, BMW will lift its stake in Rolls-Royce to just over 10%.