RPT-BMW revamps "i" electric car division to focus on self-driving tech – Reuters

Posted: Friday, June 03, 2016

(Repeats story published late on Thursday)

By Edward Taylor and Irene Preisinger

MUNICH, June 2 BMW has transformed its
“i” division into a development centre for self-driving cars, a
board member told Reuters, a major strategic shift for the unit
previously focused on making a family of lightweight electric
vehicles.

While Tesla’s Model 3 will hit showrooms in 2017,
and as rivals Porsche and Audi are working on all-electric cars
for release by 2019, the German carmaker appears to have put
such cars on the back burner. Its next fully-electric car is not
due until 2021.

The company has changed tack after its only fully
battery-powered car, the i3, failed to gain traction with the
public, with only 25,000 sales last year. By contrast, Tesla has
already received more than 370,000 orders for its Model 3.

Now, rather than seeking to match the likes of Tesla and
Porsche with a new zero-emissions sports limousine for release
within the next two years, its main focus will be on developing
an electric car with the next generation of technology:
autonomous driving.

In an interview at the company’s headquarters in Munich,
BMW board member Klaus Froehlich, who is in charge of
development, said he had relaunched the i division in April as a
unit devoted to producing cars that drive themselves.

“It is now in ramp-up stage. We call it Project i Next.”

The revamp also follows at least four high-profile staff
defections from the division this year. Dirk Abendroth, manager
of BMW’s “i” powertrain group, Henrik Wenders, vice president
product management BMW “i”, and Carsten Breitfeld, vice
president engineering, head of the i8 vehicle programme, were
poached by a Chinese electric vehicle startup.

As part of its autonomous driving push, BMW is hiring
experts in machine learning and artificial intelligence. It is
also integrating the functions of existing computer driven
assistance systems like cruise control, emergency braking,
lane-keeping support and automatic parking.

RIDE-HAILING

With a fully autonomous vehicle, BMW could launch a
ride-hailing business without having to pay drivers, Froehlich
said, giving carmakers a competitive edge over new ride-hailing
companies like Uber and Lyft which are eroding car
sales by making part-time use as convenient as ownership.

Earlier this month Toyota Motor Corp said it would
invest in Uber, and Volkswagen announced a $300
million investment in Gett, a smaller ride-sharing company.

BMW too may partner with a ride-hailing firm, particularly
in markets like China, but the Bavarian carmaker’s strategy on
potential partnerships with companies in this space is still
being worked on, Froehlich said.

Sales of highly autonomous vehicles – ones where permanent
active input from the driver is not required – are not expected
to gain traction until 2020, but could then rise to around 9
million a year by 2025, according to analysts at Exane BNP
Paribas.

China, the world’s largest car market, is likely to be the
market where autonomous cars will first emerge on a large scale,
Froehlich said.

“China is extremely fast implementing technology. Last year
more electric cars were sold in China than in all the other
global markets combined,” he added.

BMW is also considering expanding in the area of reserving
parking spaces and electric car charging stations over mobile
phones, a market which is still fragmented within countries. The
carmaker has already invested in ParkNow and Parkmobile, two
digital parking and payment services.

“We want to actively participate in a consolidation
process,” Froehlich said.

(Reporting by Edward Taylor and Irene Preisinger; Editing by
Pravin Char)

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