BMW Group paves the way for production network of the future

BMW:BMW Group paves the way for production network of the future

Systematic transformation towards electromobility +++ Investment of
400 million euros in new assembly for plant in Munich +++ Fixed
costs reduced by 500 million euros +++ New cluster vehicle
architecture from mid-decade on +++ Smart management of plant
capacity strengthens competitiveness

Munich. The BMW Group is speeding up the shift
towards electromobility and strengthening its global network for
production of electrified vehicles. The company is investing 400
million euros in a new vehicle assembly at the main plant in Munich
and concentrating its European production activities for internal
combustion engines at the Steyr and Hams Hall locations. “We are
systematically implementing our electrification strategy. By the end
of 2022, each of our German plants will be producing at least one
fully electric vehicle,” according to Milan Nedeljković, member of the
Board of Management of BMW AG responsible for Production.

The BMW Group has one of the automotive industry’s most flexible
production systems worldwide. “We are capable of producing both
vehicles with combustion engines and electric drive trains on a single
line and responding flexibly to customer requests,” said Nedeljković:
“This is a crucial success factor.” Nedeljković has been in charge of
the Production Division for just over a year. “During the Covid-19
crisis, we have proved that we can respond swiftly and effectively to
even highly volatile market developments and, at the same time,
permanently improve our cost structure,” underlined the Production
head. “The progress made this year will reduce our fixed costs by
about half a billion euros by the end of the coming year.

Construction of new vehicle assembly at Plant Munich

The BMW Group is systematically gearing its main plant in Munich
towards the future. Following the expansion of the body shop and
construction of a new resource-efficient paint shop between 2016 and
2018, the company will be investing around 400 million euros in a new
vehicle assembly between now and 2026. “We are continually developing
Plant Munich towards electromobility and creating efficient and
competitive production structures for this purpose,” explained
Nedeljković. “This decision signals our strong commitment to the
Munich location.”

Manfred Schoch, Deputy Chairman of the Supervisory Board and Chairman
of the European and General Works Council of BMW AG: “The decision to
build a new assembly at our almost 100-year-old Munich plant shows
that transformation can secure, and even create, industrial jobs in
the heart of the city – if it is approached strategically, and with
courage. This decision provides a model for successful transformation
in the German industry.”

The future assembly and its production processes will be designed for
a new cluster architecture geared towards electric drive trains.
Nedeljković: “This architecture will be in use from the middle of the
decade. It will ramp up for the first time at our future plant in
Debrecen, Hungary, before being rolled out across our global
production network in stages.”

The new assembly in Munich will be built on the site currently used
for engine production. The combustion engines with four, six, eight
and 12 cylinders produced there will be manufactured at the company’s
locations in Steyr in Austria and Hams Hall in the UK going forward.
“Restructuring our engine production network is a strategic move
geared towards the future. We are also boosting our efficiency and
optimising our capacity utilisation,” explained Nedeljković.

Engine production will be relocated from
Munich in stages by no later than 2024.

The employees will go on to work in different planning and production
areas at the Munich location or other sites in Bavaria. At its
Competence Centre for E-Drive Production in Dingolfing alone, the
company will increase employee numbers from 1,000 currently to up to
2,000. “The transformation of our plants and securing future jobs go
hand in hand,” underlined Ilka Horstmeier, member of the Board of
Management of BMW AG responsible for Human Resources, with regard to
the upcoming structural changes in engine production. “Here in Munich,
we will prove once again that the BMW workforce can handle change. Our
employees will receive intensive support and training throughout this
process.” More than 50,000 people at BMW Group have already been
trained for electromobility since 2009.

Transformation towards electromobility

The realignment of the production network is based on three
priorities: transformation towards electromobility and digitalisation;
efficiency of processes and structures; and sustainability in
production and logistics. The expansion of electromobility in the
production network continues. Our Chinese plant in Dadong also began
producing the BMW iX3* this year. “By the end of 2022, all German
plants will have at least one fully-electric vehicle in their
programme,” underlined Nedeljković. From next year, the BMW i4 and
BMW iX* will come off the production lines in Munich and Dingolfing
respectively. Fully-electric variants of the new BMW 7 Series and the
future BMW 5 Series are also ready to go in Dingolfing. Plant
Regensburg will also start manufacturing the new BMW X1 in 2022, which
will be available both with an combustion engine and a fully-electric
drive train. From 2023, BMW Group Plant Leipzig, which has built the
iconic BMW i3* electric car since 2013, will produce the successor to
the MINI Countryman, with a combustion engine and as a fully-electric variant.

At the same time, the BMW Group is expanding its capacity for
manufacturing electric drive trains. The company is investing in
production equipment for highly integrated e-drives and high-voltage
batteries at the Competence Centre for E-Drive Production in
Dingolfing. The Leipzig and Regensburg locations are also currently
setting up equipment for production of battery modules and
high-voltage batteries from 2021. In parallel, the company is also
increasing production capacity for e-drive housings at Plant Steyr.

“Allocating capacity in this way places a deliberate emphasis on the
flexibility of our plants and makes them more efficient and more
competitive. Long-term agreements with employee representatives also
play an important part in this,” added Nedeljković.

Sustainability in production

The BMW Group has reduced resource consumption and CO2
emissions in vehicle production by 50 percent since 2006 – which is
much more than other European manufacturers. The amount of
CO2 generated per vehicle will be reduced by another 40
percent from 2019 levels by 2025 and 80 percent by 2030.
“Sustainability is a fundamental aspect of modern production,”
underlined Milan Nedeljković, adding: “By the end of this year, our
plants worldwide will obtain their electricity exclusively, 100
percent, from renewable energy sources.” To do so they will take
advantage of the best options at each location – from solar energy in
Oxford, Mexico and China, to biogas in South Africa, to wind power in Leipzig. 

In addition to using renewable energies, water, solvent, gas and
electricity consumption will be further reduced in parallel. For
example, the company is using data analytics to minimise machines’
power consumption. The amount of waste per vehicle is also
continuously decreasing, making the BMW Group one of the world’s most
sustainable automotive manufacturers. The BMW Group’s position as
sector leader in the “Automobiles” category of the Dow Jones
Sustainability Indices World and Europe, announced just a few days
ago, underlines this.

*) Consumption/emissions data:

BMW i3: fuel consumption combined: 0,0 l/100 km;
power consumption combined: 13,1 kWh/100 km; CO2 emissions combined: 0 g/km

BMW iX3: fuel consumption combined: 0.0 l/100 km;
power consumption combined: 17.8-17.5 kWh/100 km; CO2 emissions
combined 0 g/km

BMW iX: fuel consumption combined: 0,0 l/100 km;
power consumption combined: < 21 kWh/100km in the WLTP test cycle*; CO2 emissions combined: 0 g/km. Data are preliminary and based on forecasts.

Original Press Release