Success story from ex-plane enginemaker

Success story from ex-plane enginemaker

Berni K. Moestafa, The Jakarta Post, Jakarta

BMW calls its cars ultimate driving machines.

The words are Ultimate-Driving-Machines. Combined, they
describe what the company claims to be pure driving pleasure.

This is the BMW promise many people hold onto when choosing a
car to reward their hard-earned success. Getting a taste of what
BMW promises to deliver means getting under the skin of the
company.

"BMW is a technology driven company," said Joachim Milberg,
chairman of the German-based BMW AG's board of management, in an
interview with The Jakarta Post last month.

The German bent on technology may leave some people cold, but
hardly if it is applied the BMW way.

Quoting Milberg from a book on the company's history: "Brand
cultures are shaped by personal passions and longings. Our design
technology is geared to fulfill those desires."

Last century's economic boom made a wide range of desires
affordable, enticing car makers to launch new models that cater
these demands.

At BMW, this trend is marked with the introduction of new
roadsters, such as the BMW Z3 and the Z8, and its adventure into
unchartered territory with the X5 sport activity/utility vehicle.

Other companies went on the same production binge, hoping to
get a foothold in the more segmented car market. As more models
fill up the streets, the harder it has become to distinguish
oneself from the competition.

"First of all, BMW is a premium brand," Milberg expounded.
This, he said, meant added value in product substance and brand
image.

Product substance is easily understood as the hardware of a
car, a promise of cutting edge technology for which people are
willing to pay more.

And then some more for buying the BMW brand image. But what
exactly does BMW stands for?

"A dynamic, challenging and cultivated way to drive," he said.
With this, the car manufacturer hopes to speak to people who live
by these values.

"There is a similarity between the BMW brand and the profile
of the buyers," Milberg said.

When looking at existing profiles, the qualities "dynamic" and
"challenging" are most likely to be found in younger people.

For those climbing the ladder of social status, they might
also mean "hard work" and "ambition".

Of all BMW models, they seem to be best personified by the BMW
3 series. Hence the taste: Buying a BMW 3 is celebrating one's
first success.

By contrast, Mercedes Benz's image appears to come from a top
down approach, where its S and E-classes rule the market of
corporate bosses.

President of PT BMW Indonesia, Klaus Biskup, said the 3 series
is the company's highest selling range, favored by young business
executives.

"The 3 series is closer to our image," Biskup said.

However, when asked for the current epitome of the BMW
philosophy, Milberg pointed to the new 7 series.

This BMW 7 is packed with the latest of everything in the auto
industry. So much so that Milberg claimed it to be a revolution.

Underlining its premium brand status, the BMW 7 revolution
comes with an estimated price tag of Rp 1.7 billion (about
US$165,000).

Anyone willing to fork out that amount for a car must have
been riding a wave of success for quite some time. For BMW
itself, the wave has been a long and often not easy ride.

In fact, driving was not the first thing BMW had in mind.

Memories of BMW's early passion is to be found in its emblem:
a rotating propeller of an aircraft in the white-blue colors of
the Bavarian coat of arms.

The Bayerische Motoren Werke (BMW) was founded in 1917, as a
company producing aero engines. Just two years later, a plane,
powered by a BMW engine, broke the world record for altitude when
it ascended to 9,760 meters.

The year 1919, however, also marked the end of World War I,
when a five-year ban was imposed on German aero engine products.

To survive, BMW changed gear and manufactured motorcycles. But
it was not until 1928 that BMW became a car manufacturer and in
1932, the 3/20 model rolled off the production line, the first
car to bear the BMW emblem.

That followed with the BMW 303, carrying the first kidney
shaped radiator grille, which soon became the trademark of the
company's cars.

The company struck gold when it introduced its first 3 series
in 1975. The 3 series became BMW's best selling range.

In the fast pulsing markets of Asia, BMW cars quickly won the
hearts of many young executives.

Although Asia represents only an 8 percent to 9 percent share
of the company's global sales, the market is growing fast.

In 1998, the Asian market share stood at 6.9 percent. That
grew to 7.4 percent in 1999 and 8.6 percent last year.

Japan made up around half of BMW sales in Asia, Milberg said.

But in the crisis-ridden Indonesia, BMW sales growth has been
even more impressive.

As of September, BMW car sales hit 2,418 units, rising by
about 25 percent from the corresponding period last year. To
date, BMW dominates the local luxury car segment with a 40
percent share as of August. That compares to a 29 percent leading
market share for the whole of last year.

"Indonesia is a very important market for BMW. It's so
important that we started a new subsidiary earlier this year,"
Milberg said.

But as the new 7 model shows, this does not mean that prices
of BMW cars will drop anytime soon, if at all.

What it does show is that the company intends to stay in
Indonesia regardless of conditions here, assuring future BMW
owners of a satisfying way to celebrate success.