Finally, a $1200 BMW (but You Have to Pedal It) – Businessweek (blog)

Posted: Tuesday, March 04, 2014

BMW Cruise Bike 2014Courtesy BMWBMW Cruise Bike 2014Drivers visiting BMW dealerships might be a bit perplexed when they see the company’s newest models, which have only two wheels and no engine.

The company that makes the “Ultimate Driving Machine” just unveiled its third-generation of bicycles for sale at, well, BMW (BMW:GR) dealerships. There are five models, including a casual hybrid ($1,242), a burly mountain bike ($4,136) and a high-tech cruiser that comes with a Bosch motor and battery pack ($3,727).

Are they good bikes? Who knows? They look pretty sharp, with aluminum frames and Shimano (7309:JP) components. But it really doesn’t matter. Think of them as rolling billboards.

The risks to the two-wheeled product platform are pretty low. If the bikes are sub-par, it won’t make a lick of difference to BMW car sales, which surged 8 percent last year to 1.66 million worldwide. And if the bikes are great, they will burnish BMW’s engineering credibility, at least a little. Any marketing mojo will come in a far more credible vehicle than, say, a glossy magazine ad or that silly TV spot in which a rattlesnake strikes as a BMW zips past.

A similar strategy played out handsomely at the Winter Olympics in Sochi, where BMW bobsleds helped an underdog U.S. team slip by the German favorites (who raced in pods bolted together by a state-backed enterprise with roots in communist East Germany). After the U.S. team grabbed four medals in the sport, diehard German bobsled fans (there are many) were peeved at BMW for not sticking with its home team.

BMW isn’t saying how its bicycles have performed financially, only that it expects all of its “lifestyle” products to “make a positive contribution to the brand as a whole,” BMW spokeswoman Susanne Radl wrote in an e-mail. “Obviously, this means they have to prove themselves profitable,” she added.

Most luxury carmakers play the merchandise game—Ferrari arguably does it best. Profitability, however, can be defined in a lot of different ways. If a BMW watch ($318),  carbon-fiber suitcase ($1,056), or teddy bear ($38) makes for a slightly more loyal customer, the company has moved the needle and easily covered its costs.

The BMW bikes, however, aren’t just marketing vehicles, they’re green marketing vehicles—which is a particularly valuable asset as the company pits new electric offerings against Tesla (TSLA) sedans and Toyota (TM) Priuses. (Prii?)

“BMW sees itself as a provider of individual transport solutions,” Radl wrote. “As energy prices continue to rise and the environmental awareness grows, the bike is becoming more important to us all.”

Elon Musk may have a stable of spaceships, but he still doesn’t make a bike—at least not yet.


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