February 22, 2011

BMW Unveils Hybrid, Electric Sub-brand Vehicles

German luxury automaker BMW unveiled its long awaited "BMW i" sub-brand on Monday, a line of battery-powered cars made of carbon fiber and aluminum.

The company said that two new models -- the BMW i3 electric car for city use and the BMW i8 plug-in hybrid for those seeking a more powerful vehicle -- would be available in 2013.

"With BMW i, we are building on the success and strength of our core brand," said Ian Robertson, BMW's director of sales and marketing, in Munich on Monday.

"The BMW i3 - previously known as the Megacity Vehicle "“ will be the BMW Group's first series-produced car for urban areas to be driven by electric power alone," the company said in a statement.

"The BMW i8, meanwhile, is based on the BMW Vision EfficientDynamics concept study. Its plug-in hybrid drive blends the sporting ability of a high-performance machine with the fuel consumption and emissions of a small car."

Additional BMW i vehicles will follow, company executives said.

"There is room for more products," the New York Times quoted Klaus Dräger, BMW's head of development, as saying.

BMW's new plug-in vehicles will retain the company's familiar kidney-shaped grill design, although it will have no function since battery powered vehicles do not require a grill.

The company said it is targeting young, affluent customers with stylish, yet environmentally-friendly vehicles.

"This group has a keen sense of design and style along with passion for the environment," said Robertson.

BMW said it would invest $540 million (400 million euros) to build the new sub-brand vehicles at BMW's plant in Leipzig, eastern Germany.  The initiative is expected to generate 800 jobs.

The company also said it is investing $100 million to create a New York-based venture capital unit called BMW i Ventures, which will offer mobility services such as vehicle sharing and navigation systems.

The unit already has a stake in My City Way, a New York-based start-up company that offers location-based services.

BMW hopes the ventures unit will help generate additional revenue with services that may also be sold to people who don't even own a car, such as high-end car sharing.

BMW i Ventures will work with the mobile phone application "ËœMy City Way' to provide services such as route planning and local information.

"Mobility requirements are changing in rapidly expanding megacities," Robertson said.

Although analysts were not surprised by BMW's announcement of its new sub-brand, they were interested in the company's marketing strategy, and the combination of an electric powertrain, aluminum chassis and carbon fiber-reinforced plastic body.

The company said it is planning an initial 40-city worldwide roll-out of the vehicles.

However, BMW will face fierce competition in the electric and hybrid auto market, with Nissan set to introduce its Leaf model in December while its French partner, Renault, gears up to launch its Zoe version from mid-2012. 

Meanwhile, Peugeot-Citroen will begin offering clients a long-term rental program with their Ion and C-Zero models.

Daimler is expected to launch its electric Smart ForTwo car in Europe early next year, and is working with the China-based firm Build Your Dreams (BYD) on a concept for the Chinese market.

Volkswagen, the largest European automaker, is expected to launch an electric version of its Golf, and is also working on several hybrid models.

Toyota's Prius and Chevrolet's Volt are available today.


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