RANTS #464

September 24, 2008

An automotive rarity.

By Peter M. De Lorenzo

Detroit. Almost three years ago now, at the Detroit Auto Show in January, 2006, I wondered out loud about the direction that BMW was going. What I observed back then was a burgeoning portfolio of vehicles littering the show floor, a clear indication that BMW was slipping into that dreaded pursuit of being all things to all people, the same tack that had nearly ruined the Mercedes-Benz brand image in this country (and which still haunts the brand to this day).

There were so many BMW models on display - and iterations of models – that I actually lost count. This was BMW? This massive display was supposed to impart a good feeling about the direction of the brand? It had the direct opposite effect, as a matter of fact, and it was unsettling.

But that wasn’t all, because it wasn’t just on the auto show floor that BMW’s strategy was becoming glaringly apparent. BMW marketing had embarked on an aggressive, sales-at-all-costs mentality, with the idea of a BMW being in “every garage in America” seemingly the thinly-disguised goal. End of year sales “events,” massive incentive marketing gambits, and every sales trick in the book were used by BMW marketers to push the brand on the American consumer public. And because of that BMWs were becoming as ubiquitous in some parts of the country as Camrys - and it was a giant bowl of Not Good, especially for an automaker that built its reputation on the inherent goodness of a boxy little sport sedan that was a blast to drive, the now legendary 2002.

Back at that auto show I got the distinct impression that BMW as a company had taken an alarming turn, that somewhere in the din of Toyota-like “sell-a-thons” and incentive-ized leases, the company had lost a big chunk of its soul along the way.

And it just wasn’t supposed to be that way.

BMWs were never about being all things to all people. If you drove one of those original 2002s back then you marched to a decidedly different drummer and when you think about it – what with the 2002 being introduced to this country at the very end of the muscle car era – you couldn’t have driven a more different vehicle if you tried. But not surprisingly driving enthusiasts flocked to them, and the BMW “thing” grew exponentially over the years.

But where BMW grew to was another thing altogether. The brand was in danger of losing its connection to whatever it was that was magic about the 2002 to begin with, and not only that, it was veering dangerously close to becoming just another car company.

And though BMW still builds some superb cars - we consider the 3 Series to be the best all-around car in the world – it’s clear that the Toyota sales mentality had infected the brand to its core in the U.S. Too much emphasis on volume for volume’s sake, too much dwelling on covering every possible niche that the company could think of, and precious little time being spent on what got BMW to where it was in the first place had taken a significant toll.

But BMW’s modern day habit of chasing every possible niche in the automotive spectrum looks to be coming to an end. It was refreshing to read an interview with Jim O’Donnell – the CEO of BMW in the U.S. since last spring - in this week’s Automotive News whereupon he went on record as saying that he was going to completely rethink BMW’s marketing strategy here in the U.S.

Besides slashing costs (and 90 jobs in North America), O’Donnell has made a conscious decision to actually reduce BMW’s footprint here in the U.S., cutting its allocation by 44,000 units. It’s one thing to be forced to take that kind of action due to the economy, it’s quite another to make that kind of choice on your own. As a matter of fact it’s simply unheard of in this day and age. O’Donnell is also going to reduce spending on incentive marketing and end the now traditional BMW blow-out sales event in December - hallefrickinluja. He also plans on cutting lease volume by 10 percent here in the U.S.

And in what should be of particular interest to the hard core BMW faithful, O’Donnell is proposing the reintroduction of four-cylinder engines here which, if placed in the 1 Series, would in fact be the second coming of the 2002.

Auto execs like Jim O’Donnell don’t come along every day. It’s nice, of course, to have the luxury of being in charge of a brand like BMW, one with such residual goodness and reputation – despite the bone-headed marketing screw-ups – that you’d have to be an absolute idiot to run the thing into the ground (and oh how we know there are plenty of those out there that fit that bill), but then again you have to be able to “get” it on a deep enough level so that you can take a step back, re-group and re-focus on the essence of the brand, reminding yourself - and the organization - what got you to this point in the first place. And O'Donnell clearly gets it.

Here’s to a rarity in today’s automotive world: a top exec who actually understands when to say when.

Thanks for listening, see you next Wednesday.