BMW looking to cut model range including entry-grade 3 Series, says report

American magazine Automobile claims BMW Group is set to slash its model range after the car division's earnings fell 22 per cent last year.

BMW's Chief Financial Officer, Nicolas Peter, is looking to cut its exposure to the unprofitable lower-priced segments, reduce development costs by using simulators instead of physical prototypes and simplifying model lineups and engine options.

The models Peter has put under the microscope include the costly-to-build rear-drive small cars like the 2 Series and, in a move that may deliver a shock to BMW’s sales figures, the entry-level but high-volume versions of the 3 Series.

The upside is that the list of models potentially heading for oblivion includes some of the brand’s more mediocre efforts, including the 3 Series Gran Turismo, the 2 Series Gran Tourer and Cabriolet, the 6 Series Gran Tourer and the X2 crossover.

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Some surprising potential victims include recently launched or revised models like both of the two-door 8 Series models, the short wheelbase 7 Series limousine and even the Calvin Luk-designed Z4, which was only built in the first place because Toyota did the heavy financial lifting.

The groundbreaking i3 and i8 innovation models will also be axed, and though BMW hints there are replacements for both, they won’t be even remotely like-for-like.

Code-named U15, the i3 “replacement” is due in 2022 as both a BEV and a fuel-cell EV, and will even sport a long-wheelbase version for the Chinese market.

The i8’s replacement, code-named i12 so far, will be based around the current car, but will be shorter, lighter and more powerful.

Also slated for a 2022 debut, the i12 will use a 150kW electric motor, the gruntiest version of the 2.0-litre, turbocharged four-cylinder petrol BMW motor. Regardless, it won’t be the grunter the proposed i8M or i9 models were going to be, falling at least 200 horsepower short of both proposals, but it will be cheaper to develop, which seems important at BMW nowadays.

The all-important production version of the iNext concept will almost certainly carry the i6 badge into production, while using three different powertrain options.

The first will use a 250kW motor to give it rear-drive and a 63kWh battery to power it, with a 400km range. The next step will have 320kW of total power, with a 92kWh battery pack and the flagship version with a 150kW front motor and a 250kW rear motor, plus the option of a 103kWh battery.

The surge in big SUVs will continue, with the X7 locked down and the BMW board approving a large X8 coupe crossover (which should look nothing like the X7), while the 8 Series will continue after this model cycle as a four-door coupe only.

And over at Mercedes...

New Daimler CEO Ola Kallenius has already dropped a broad hint that the days of expanding model lines are over at Mercedes-Benz, and selling half of the Smart brand to Geely is the only thing keeping its neck off the Daimler chopping block.

He has already raised flags over the future of the SLC roadster (which used to be called the SLK) and the pace of the shift in consumer tastes towards SUVs and crossovers will determine which of the car-based models survive.

“I do not think we’re looking at any radical trimming of the tree here,” he told Top Gear magazine late last year. “But, over the next ten years, we’ll look at the portfolio, look at what makes sense and cater it to where the market is going.

“We have had about 20 years of almost uninterrupted broadening of the portfolio, especially on the SUV side, if you look at how successful that has been over the years.

“[BETWEEN] 2020-2022 this will take us to well above 40 models. And even if we love every one of our ‘children’, and we do, we must be very rational. We must not hesitate to slim down as well,” he hinted.

The two companies, normally bitter enemies, have signed an agreement to jointly develop component sets for electric cars to be shared between them.

What they couldn’t do, despite obvious economic advantages, was pull the trigger on a joint chassis architecture - the most expensive part of the engineering development other than the battery pack.

That failure has left both companies compromised, though BMW more than Daimler, which already has dedicated EV architectures under development.

The proposals, stalled in the April meetings, would have left the two companies with four architectures to engineer, develop and build by 2028 instead of 10, sources confirmed.

While Daimler will roll out its first electric car with a dedicated EV architecture in the EQ S next year, BMW has plumped for the cost-saving option of designing a single architecture to handle EVs, plug-in hybrids and internal-combustion cars. Daimler took a similar step with its recently launched EQC all-electric crossover.

The catalyst for Daimler's cost cutting has been the looming multi-billion euro fine it faces for its thermal switching for diesel emissions, plus a horde of lawsuits that have ground the Stuttgart courts to a halt.

BMW has been hammered by the trade spat between America and China, and has also seen its share price almost halve, from €122 to €65, since 2015, despite consistent profitability.

The increasing love affair with heavier SUVs has left both carmakers desperately exposed to the 2020-21 EU7 emissions laws, which will force them to drop their fleet emissions by 25 percent in the next 12 months.

Peter’s plan, which has already run afoul of BMW’s development boss Klaus Fröhlich, is to slash about €13 billion from the development budget by cutting both prototypes and about every second engine/gearbox combination.

The pushback from the development department has been because BMW is entering one of its trickiest phases, with nobody quite sure what the BEV/plug-in hybrid/internal-combustion model mix will be and having to deliver all three at the same time.

It’s also tasked with delivering the iNext BEV, plus next year’s iX3 SUV at the same time, and continuing its research into driving autonomy.