BMW Considering Adding Fourth Brand
But how would that happen?
By Brendan Moore
BMW made public its strategic review today, and as part of that review disclosed that it is open to adding a fourth brand, either through acquisition or internal development. The new brand would join the current lineup of BMW, Mini and Rolls-Royce.
The first name that comes to mind after BMW’s statement is Volvo, since Ford is still interested in selling the Swedish car company, but BMW put paid to that today, saying that it had ruled out an acquisition of Volvo and was focusing on other opportunities.
BMW is currently the world’s largest premium auto manufacturer, but Audi is coming on very strong, and BMW will have to work hard to maintain their number one spot in the future. BMW has stated that they intend to be selling more than 2 million vehicles a year worldwide by 2020, and the probability of the company doing that is slim without both product and brand expansion.
When looked at from this perspective, the acquisition of Volvo by BMW seemed like an awfully good match, but with that off the table, it is more difficult to imagine an acquisition that suits BMW’s growth needs.
And if BMW decides to invent a brand, where would it fit and what sorts of cars/trucks would the brand have? But that’s not the only issue around inventing a brand – belaboring the obvious, any new brand requires that you build the brand, which takes time and money. Estimates of the time and money components just for the U.S. market usually run somewhere around 10 years and 100 million dollars in brand advertising alone to adequately get an automotive brand going.
It’s an ambitious plan BMW has laid out, but I am very interested in the tactical part of the plan, which is not available yet. BMW has done everything right ever since it rid itself of the Rover/MG millstone, so it would very interesting to be a fly on the wall at BMW in Munich these days, privy to what the guys there are cooking up. I can’t wait to see what the details of the plan are.
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