BMW headquarters in Munich
In future, the group will no longer build internal combustion engines at its headquarters.
(Photo: AP)
Munich The BMW Group is reorganizing its production network. The production of diesel and combustion engines is to be withdrawn from the Munich headquarters by 2024. Large engines will be relocated to the British plant in Hams Hall, while the smaller drives will in future be completely built in Steyr, Austria.
The approximately 1,400 employees in engine construction in Munich are to be retrained or distributed to other locations, said production director Milan Nedelkjovic on Wednesday.
BMW wants to deliver every third car with hybrid or electric drive in Europe by 2025. “The more electrification we have, the greater the cost pressure,” said Nedelkjovic. With ever smaller numbers, three plants for combustion engines in Europe can no longer be fully utilized. Overall, the group wants to save around 500 million euros in the production network by the end of 2021.
BMW continues to convert its German plants to electric mobility. The locations in Munich, Leipzig, Regensburg and Dingolfing should each build at least one electrically powered model as early as 2022. Combustion engines and electric drives run in parallel on the same belt.
But that should change from 2024: In the new plant in Hungary, a technical platform will be introduced for all models, which is primarily geared towards electric cars and “which we will transport very quickly to all other plants,” said Nedelkjovic.
CEO Oliver Zipse is orienting the company more and more towards electromobility. By 2025, each model series will have an electric offshoot: After the i4 comes the iX, an electric 5 and a power-driven 7.
Print with symbolic character
In Munich, the conversion requires a new assembly – and for this the engine production has to give way in the narrow main plant. The conversion of the plant alone will cost the group 400 million euros. The withdrawal of engine production is symbolic: The foundation stone of the company was laid here with the construction of aircraft engines in the First World War.
The move is manageable for the German employees, the approximately 1400 remaining employees will get new jobs. The British and Austrian colleagues now share the risk of phasing out internal combustion engines for Europe.
Relocating to Great Britain is particularly tricky; the country’s unclear future after Brexit makes future delivery relationships uncertain. In addition, the British government recently decided not to approve internal combustion engines from 2030.
In addition to the shift in production to electric cars, China is also gaining in importance for BMW. The group now sells twice as many cars there as in North America. The new free trade zone RCEP will “certainly have consequences for our production network,” said Nedeljkovic.
BMW has two large plants in China, but also has a few small assembly sites, for example in Thailand. The group operates these to avoid local tariffs. It is conceivable, for example, that the Chinese plants will become an export base for all of Southeast Asia in the future, according to the group.
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