BMW Considering Adding Fourth Brand

But how would that happen?

By Brendan Moore

09.27.2007

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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Author: Brendan Moore

Brendan Moore is a Principal Consultant with Cedar Point Consulting , a management consulting practice based in the Washington, DC area. He also manages Autosavant Consulting, a separate practice within Cedar Point Consulting. where he advises businesses connected to the auto industry. Cedar Point Consulting can be found at http://www.cedarpointconsulting.com.

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4 Comments

  1. Volvo was a perfect fit for BMW. I don’t see why they walked away from that deal. Who are they going to buy now, Jaguar? I don’t think so. Lots of problems there.

  2. Doesn’t BMW still own the rights to the Austin-Healey name. I’m willing to bet that BMW can do a good job on a new, 2010 Austin-Healey.

  3. britlover: they own the Triumph name as well. Either one would seem to be a good nmae for a new brand, but then there is the expense of bringing back a brand.

  4. Doesn’t BMW own the Riley name as well?

    I thin they got a lot of brand names when they bought Rover and MG originally. I think only the Rover and MG names went to the Chinese.

    Riley is not a well-known name, but it’s a good name – short and easy to remember, to spell, etc.

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