After 8 years of “start-up period”, BMW has officially entered the “Era of Engel”. What is Engel’s trump card in the fiercely competitive Chinese market? Is the high-level takeover glorious or frustrating? And how will BMW fight a new battle with old rivals?
After 18 years, Engel has come back to China, to the Asia market that he loves the most. 20 years has flashed by. Now the BMW tree has firmly taken its root in this land and yielded the sweetest of fruits. In a sense, Engel’s mission is to prune this towering tree, and explore the possibility of another blossom.
Looking back, BMW Greater China was established in 2004. It was a spectacular year for the company, whose products were avidly sought-after in the global market, with sales exceeding a million units for the first time. But BWM’s share in the Chinese market was almost negligible, with only 15,480 units sold in a year, a 16% drop even from 2003.
If someone had said at the time that BMW would climb to the second spot in the Chinese luxury car market in terms of sales, they would be considered delusional. However, under the leadership of Christophe Stark, the former President and CEO of BMW Greater China, the company has made a miraculous leap forward: total sales volume in 2012 reached 326,444, a 20-times increase compared with 8 years ago.
Just when BMW has managed to scale this unprecedented height, to everyone’s surprise, Stark suddenly announced his retirement, with only a year left in his term, leaving the China market he was most familiar with. Receiving the baton was Karsten Engel, former President of BWM Germany.
This is the so-called “high-level takeover”, which is often more challenging than glorious.
In the early days of the takeover, rumors and conjectures about the company abounded, brought on by the leaving of a succession of three senior executives at the company – Christophe Stark, Lu Yi and Daniel Kirchert. Among other reasons, multiple analyses point to BMW’s declining profitability in the past 2 years and its persistent failure to beat Audi in the Chinese market. After Engel assumed his new position, the Headquarters will continue to take back power, which is exactly why the reshuffle has happened.
On July 10, 2013, in Engel’s Beijing Office, Auto.sohu.com sought confirmation about the “Headquarters taking back power” theory. Engel replied: “As China is one of our most important markets, we hold one or two meetings every year when the Board discusses major decisions about it. This has always been the mechanism, and will not be any different just because of some personnel changes.” Engel, the former President of BMW Germany, believes that BMW’s operating mechanism in China is the same with that in Germany.
Competing with Audi for the largest share in China’s luxury car market is unavoidable. Although BMW has repeatedly claimed that surpassing Audi is not its goal, given the two automakers head-to-head rivalry over the years in both China and the world at large, people are watching with keen interest the competition between these two German automotive giants.
Whether Engel is willing or not, since he took the job as President of BWM Greater China, public opinion has decided that his ability to lead the company to beat Audi will be the benchmark of a successful career. In its interview with Engel, Auto.sohu.com mentioned that the sales of BWM 5 Series were merely 800 units short of Audi A6L’s in May. While saying as usual that BWM was not only after sales volume, Engel’s excitement was apparent, “if it is really that close, maybe we should do something.” So beneath the gentle and humble exterior is the driving ambition to capture the largest auto market in the world.
After 8 years of “start-up period”, BMW has officially entered the “Era of Engel”. What is Engel’s trump card in the fiercely competitive Chinese market? Is the takeover glorious or frustrating? And how will BMW fight a new battle with old rivals? These questions will be answered one by one in the time to come, and with it, the future landscape of China’s luxury car market.