Peter Schwarzenbauer, Member of the Board of Management of BMW AG, MINI, Rolls-Royce, BMW Motorrad, Customer Engagement and Digital Business Innovation BMW Group, does not mince words. That makes him the ideal individual to talk to about the future of mobility.
Mobility as we have known it for decades is facing fundamental change. At MUST (the Munich Summit), you even said that BMW is currently fighting for its survival; a fight that will decide whether or not automobile manufacturers will even exist in their present form in a few years. Is it necessary to completely rethink “mobility”? In which different directions is BMW thinking?
The automotive industry is indeed experiencing the most significant transition phase in its history. I am certain the next few decades will usher in more changes than the last one hundred years. The key question will also be a question of faith in the automotive industry as to whether it will be possible to earn the same amount of money with mobility services as with the sale of vehicles. I see tremendous opportunities. If we are able, in addition to selling fascinating vehicles, to also offer individuals minute by minute mobility in the future without them needing to make larger investments, then that is an impressive prospect, particularly for premium and luxury goods. This approach will give us access to a whole new and extremely large segment of customers. That might make our future business model even better than our current one over the long term. We have a clear vision of how many of our clients will be mobile after 2030: autonomous, electric and fully connected. And we are already working towards that vision now.
From your point of view, what role do startups play in the transformation process? Also, how does BMW find suitable startups?
Startups often act as a catalyst in the process, particularly due to their completely different way of thinking. The scene survives based on the belief that anything is possible. I am convinced that this kind of limitless optimism releases an incredible amount of energy. Startups are also used to thinking in fast product cycles. Although we are a leader in innovation, some young companies have shown us how large companies can be more flexible and implement things faster. Here at the BMW Group, we have a diverse range of connections with the scene. As an example, we invest in the best and most innovative startups with BMW i Ventures while also supporting them with our expertise and network as an established global player. With URBAN-X, our MINI Accelerator, we support startups that concentrate on innovative concepts in urban areas. And with the Startup Garage, we give selected startups the opportunity to participate in a special program that lasts several months. The program focuses on developing a functioning prototype for an application that is relevant to us.
“Silicon Valley should not be the only location to offer the best conditions for bright minds and new ideas”
Munich was recently named the Digital Hub Mobility by the Federal Government. Are these types of overarching initiatives necessary to remain competitive internationally? What does BMW hope to gain from the interdisciplinary collaboration?
What people need from mobility is changing at a mind-boggling speed. In the future, we will be able to offer vehicles that are autonomous, connected, and zero-emission, which will open up a whole new array of mobility options. That will also require individuals to engage in a process of rethinking and learning. We already want to offer them alternatives for personal mobility; alternatives that individuals find appealing instead of feeling like they have to give something up. That is exactly what we are working on in Digital Hub Mobility with all of the players in the private sector and with partners in science and the public sector. That work naturally also aims to make Germany even more competitive internationally as an innovative location for mobility solutions. After all, Silicon Valley should not be the only location to offer the best conditions for bright minds and new ideas.
Autonomous driving and electromobility – both are major topics. With iNext, BMW has already announced their plans to put an autonomous, connected electric car on the market by 2021 at the latest. What do you consider the biggest challenges? Also, will we start seeing these cars in urban areas?
Autonomous driving is a major challenge in terms of technology. This particularly applies to large cities where pedestrians, cyclists, public transportation and delivery vehicles need to be considered. Situations that we deal with intuitively as humans have to be taught to a machine first. That means processing an unbelievable amount of data in real time with a tremendous amount of processing power. To give you a better idea: if the volume of data we are talking about was burned on DVDs, the resulting stack would be more than 60 miles high. To be able to drive autonomously, it is necessary to have navigation material that is precise down to a millimeter, which means having a completely digital image of the area. That is why we teamed up with Daimler and Audi to acquire the mapping service Here from Nokia. As for autonomous driving, we are pooling our resources and knowledge with Mobileye, Intel and just recently with Delphi as well. We are running several million test miles on the road for autonomous driving and are also simulating driving in a lab. The technology will progressively become visible in urban settings. With BMW iNEXT, we plan to offer serial production of a highly automated automobile, or what is known as driving at level 3, by 2021. We will not be offering what is known as fully automated driving (level 4). In the end, we of course should not forget people as a factor – they will first have to be ready to trust a machine.
“With ReachNow, we are currently testing a new dimension of individual mobility in the US”
With DriveNow, BMW is already the market leader in the German carsharing business. Are further advancements planned in the “ridesharing” sector? And do you think the sharing approach bears the risk of BMW eventually doing away with itself?
With ReachNow, we are currently testing a new dimension of individual mobility in the US that goes beyond just carsharing. For example, ReachNow customers are able to book both a vehicle and a corresponding driver. We are also testing out the delivery of vehicles to a specific location at a specified time. In an additional pilot project, MINI owners have the option of periodically integrating their vehicle into the ReachNow fleet to reduce the maintenance costs for their car. ReachNow also offers residents in selected communities the exclusive use of a car there. We consciously chose the US as our pilot market for these kinds of new mobility offers. If these projects are successful, we will of course consider expanding to additional brands and countries. In general, we do not view our mobility offers as “either/or” but rather as an obvious “have both.” Our aim is to complement our core business with a highly attractive market. Regardless of whether it is with your own car or not – people will still want to be mobile in the future.
Well-known startup representatives such as Frank Thelen never tire of naming Nokia’s demise as a threatening example of what can happen to companies that miss out on progress. How do you know BMW will not go under?
We celebrated our 100-year anniversary last year and, in my mind, did a good job at demonstrating that we would like to play a decisive and active role in shaping the future of mobility by introducing four visionary vehicles. We define the future of mobility with autonomous driving, connectivity, electrification and services. The iNEXT for 2021 sets the standards for our leadership in technology. As a company as well, we are constantly reinventing ourselves with these technological advancements. In addition to all the challenges they bring, we primarily view them as a major opportunity.