The largest luxury automaker in the world, BMW, will have a new chief executive officer – Harald Kruger – after the company’s annual shareholders gathering is finished today.
The position might need some carbon fiber nerves – to align the saying to the latest automotive trends – with the BMW Group battling German peers Audi and Mercedes-Benz for leadership position over worldwide premium sales. Analysts estimate that outgoing chief executive officer Norbert Reithofer made BMW pour more than 1.5 billion euros ($1.7 billion) or even as much as 2 billion euros to research and develop its range of carbon-fiber electric and plug-in hybrid “i” cars. The move will also translate across the normal range, as reaching crucial savings will yield massive fuel economy improvements – lowering a car’s weight by 100 kilograms could cut as much as 0.6 liters from the average fuel consumption. Even ultra-luxury subsidiary Rolls-Royce will make use of the lightweight metal for its upcoming first of a kind sport utility vehicle.
BMW, recognized for its utter German efficiency, will have more woes in that direction as it has expanded greatly in recent years, in a bid to defend the sales title it earned back in 2005. It remained the best-selling luxury automaker in the world by tapping into emerging market growth and diversifying its lineup mostly by adding new crossovers and sport utility vehicles. Kruger, a 49-year old member of the board in charge of production, needs to worry more about maintaining the group’s auto division earnings margin of between 8 and 10 percent of sales.