# Why BMW Quality is going down...



## Pedal2Floor (Jul 29, 2006)

*BMW running at 100% capacity, simultaneously irritating suppliers*

"BMW's running full-bore as it strains to double its profit margin within the next five years. Across all 23 of the company's manufacturing locations, capacity is maxed out at 100-percent, and there's nary an extra Roundel badge to be had. As BMW pushes for a 10-percent profit margin, they're also putting the squeeze on suppliers. *To the OEMs, it seems that BMW has shifted its focus from quality and innovative technology to the bottom line. *Not helping matters was a public statement by Manfred Scoch, deputy chairman of BMW's supervisory board, criticizing their suppliers for having better profits than the automaker. With their focus on building the Ultimate Driving Machine, BMW has enjoyed a reputation as a favorite customer of automotive suppliers. *Scoch's lead balloon didn't go over well with the companies that make parts for BMW, and has stirred further rumblings that there's growing dissatisfaction with BMW's apparent focus shift*. Suppliers shot back at BMW, expressing alarm at Scoch's statement and stating that their ability to generate a profit is tied to their innovation and hard work, rather than overcharging BMW. Understandably, suppliers are loath to concede any price breaks on agreements that are already in place.

For its part, BMW's decided that it's more cost effective to increase their ability to make some components in-house. With that in mind, the Leipzig and Regensburg stamping plants are undergoing expansion, and there will be a new Leipzig stamping facility in 2009. At least 200m euros will be invested in Leipzig and Regensburg, but BMW believes it's a better idea to invest its capabilities, rather than pay a supplier to sort it all out. By the time it's all said and done, further integration may happen to keep the slices on the pie chart looking healthy. If they keep ticking off the companies that make the pieces that they bolt together into automobiles, BMW may end up doing it all themselves. "

[Source: via AutoBlog via Automotive News]

http://www.autoblog.com/2007/12/18/bmw-running-at-100-capacity-simultaneously-irritating-supplier/

Obviously, this is one side of the story....but we have all seen some of the stupid value engineering that has been done to recent BMW's -- In some cases, the Wal-mart-ization of some aspect of the car. While cost and profit are always a necessary component and sometimes we consumers complaint too much, in some ways however their drive to extra profits via cheaper less quality components is also in play. Hopefully, they do not take it one step too far, or maybe given how companies work today, that would be the best thing to happen, that BMW totally screw up so that they can eventually fix the stupid.

Don't know, just thought this was interesting story and that it can explain much of the stupid we have seen.


----------



## Rich_Jenkins (Jul 12, 2003)

Very interesting. It seems to me reminiscent of a similar approach taken by MBZ in the mid to late 90's. The resultant culture shift from virtually hand-building engineering masterpieces (I'm overstating the case, but to make a point) to churning out cars with "value" in mind but happened to have a silver star on the hood.

Benz is just now recovering from the Quality control problems (and of course the ill-fated merger with Chrysler).

I wonder if BMW is headed down the same path...


----------



## sdbrandon (Mar 18, 2006)

All car makes are under pressure. This issue is not unique to BMW. 

Toyota quality has gone done across all lines as well as they strive to become GM'ified.


----------



## Bart001 (Apr 9, 2005)

If BMW is not suitably profitable, it will either go out of business or be acquired (a la "the Benz path").

The Euro vs. dollar pressure, alone, is forcing their hand quite a bit.


----------



## 335i Driver (Nov 29, 2006)

That's very disappointing to me as a consumer. It seems as every part of my car has been cheapified. From fake plastic wood trim to plastic components to flimsy body hardware, it's all disappointing. Every single piece of body hardware on my Jaguar was thicker, beefier and higher quality that my BMW.

Hopefully BMW will see the light and not go down the same path as MB.


----------



## roadkillrob (Aug 11, 2006)

Germans have always been awesome mechanical engineers, electronic engineers not so much, basically if it is mechanical BMW usually does a pretty good job, but electronics and electric components are always troublesome and guess what - everything is electronic and electric, so there is just a great quantity of things to go wrong than in the 80's and 90's!


----------



## sdbrandon (Mar 18, 2006)

If you read the Roundel, there was a good article about this.

Basically the most reliable car to buy is one with no options. When you start adding all the junk to a car the chances of having issues increase enormously. This is true for ANY car brand.


----------



## milobloom242 (Dec 28, 2004)

sdbrandon said:


> If you read the Roundel, there was a good article about this.
> 
> Basically the most reliable car to buy is one with no options. When you start adding all the junk to a car the chances of having issues increase enormously. This is true for ANY car brand.


+1 didn't see the article but of course that makes great sense.

Also, BMW has invested heavily in the last few years in a whole slew of new technology and new and updated models. So it makes sense for them to focus on recovering those investments which means unit volumes and/or price has to go up while forcing down expenses as much as possible.


----------



## #5880 (Feb 11, 2006)

335i Driver said:


> That's very disappointing to me as a consumer. It seems as every part of my car has been cheapified. From fake plastic wood trim to plastic components to flimsy body hardware, it's all disappointing. Every single piece of body hardware on my *Jaguar* was thicker, beefier and higher quality that my BMW.
> 
> Hopefully BMW will see the light and not go down the same path as MB.


Umm...

This is a "concern for quality" thread


----------



## 335i Driver (Nov 29, 2006)

lao270 said:


> Umm...
> 
> This is a "concern for quality" thread


Exactly, which is why I'm concerned because year after year after year, Jaguar, owned by Ford, is far superior to BMW. Why can't BMW put the quality of materials and workmanship into their vehicles the way Jag does? The cheap, flimsy body parts BMW uses really pisses me off.

http://www.msnbc.msn.com/id/13186768/

http://www.just-auto.com/article.aspx?id=91560

"Overall, Ford, Lincoln and Mercury nameplates placed among the top 10 nameplates, with Lincoln in 3rd place, Mercury in 8th place and Ford brand in 10th. Jaguar ranked 6th. "


----------



## sdbrandon (Mar 18, 2006)

335i Driver said:


> Exactly, which is why I'm concerned because year after year after year, Jaguar, owned by Ford, is far superior to BMW. Why can't BMW put the quality of materials and workmanship into their vehicles the way Jag does? The cheap, flimsy body parts BMW uses really pisses me off.
> 
> http://www.msnbc.msn.com/id/13186768/
> 
> ...


As long as consumers continue to buy BMW over Jaguar their is no reason for BMW to change. Consumers vote with their pocket books.

If you like Jag better, buy a Jag. If you don't, and continue to buy a product you are not happy with, don't expect it to get better.

In BMW's eyes, if sales are strong, they must be doing something right. I suspect this is true for any brand.


----------



## Bimmerista (Sep 21, 2005)

Interestingly, BMW quality was worse for wear with the E36. It actually improved with the E46 and again with the E90.

MB's issues are real but stemmed from the ill-fated "electrocomputerise" everything dogma of the 90s. Also, in Europe, MB wanted to compete with Volkswagen for top dog status in volume. The Crysler fiasco amplied matters. There is no comparison with BMW.

Until 2 years ago BMW was the most profitable mass manufacturer of cars (Porsche perhaps excluded). Their enviable percentage profit margin went down as a result of a deliberate investment in hybrid and new fuel saving technologies, which occured at the same time as a planned multi-model make over and new engine development. BMW has in the past enjoyed 8-9% margins, and therefore reaching 10% is not outside the realm of the unthinkable. Of course quality issues are always a concern when increased volume and profit margins mix but lets not get all knotted up about it: BMW can reach its goal and never compromise quality.


----------



## LoveTAH (Dec 25, 2005)

335i Driver said:


> Exactly, which is why I'm concerned because year after year after year, Jaguar, owned by Ford, is far superior to BMW. Why can't BMW put the quality of materials and workmanship into their vehicles the way Jag does? The cheap, flimsy body parts BMW uses really pisses me off.
> 
> http://www.msnbc.msn.com/id/13186768/


I sometimes wonder why they bother releasing these studies, since clearly only a fraction of people takes two seconds to read them. If you had, you would see that jag is hardly 'far superior to BMW', they're simply ranked higher. The reason BMW is ranked midpacked isn't because of quality defects, it's (largely) because of the idiotic mouth-breathers who can't operate idrive. After JDP added that section to the survey, they dropped from #3 down to the teens.



> _BMW AG's BMW brand had few defects, but one of the highest number of complaints about design - specifically about the way the brand integrated new technology into its vehicles, Ivers said._


----------



## mercury26 (Oct 30, 2006)

This is what killed the American auto companies in the 70's and 80's, quality suffered and they drove away parts suppliers. The big three started building their own parts and things have never quite recovered since then. I see nothing good coming of this trend by BMW.

Cheers,

Chuck


----------



## zen68 (Mar 31, 2007)

I'm not too sure about this article since it seems one-sided. What I do know is my current e60 and e70 have very few minor problems compare to my old e46 (330i). I also like the material better (except the leather).

Before jumping to any conclusion, I'd like to see something more objective.


----------



## mawana (Nov 15, 2006)

If suppliers don't want to cut back or share on their profits, given the Euro-Dollar performance, I don't see why BMW can continue on that path. Seeing the number of BMW's on the roads these days, it's quite clear BMW is now a mass producer aiming at gross profits from more sales. I don't agree that divesting from their current suppliers will hurt quality (because if BMW can make a quality car - what can stop them making a quality part?). On the other hand, it may be that 'perceived' quality has already suffered that the use of own-manufactured parts is not going to change the overall quality of the final future product (car.)


----------



## Virginia Bill (Oct 18, 2005)

Nebulous claims about “declining quality” always strike me as urban legend. In every field of human activity, someone is always lamenting that the past was better than the present. Safe, small-town America; older, more reliable cars; smarter, better prepared students back in my grandfather’s time; a more informed electorate in the good old days. 

These arguments seldom define quality, and they usually illustrate their thesis with a couple of random anecdotes or examples. 

I’ve been buying and driving cars for almost forty years now and honestly don’t recall products of the past as better than those of the present. I’ve had cars that ran out of gas because the gauge silently broke. I’ve had exploding windshields, collapsing shocks, two electronic fuel injection systems that seldom worked right, cars that spewed oil, and brakes that failed. 

But I haven’t had a car that left me standing by the side of the road for something like fifteen years. I’ve had recent vehicles that malfunctioned, but they always got me to some repair place.

Cars are massively different, of course. I wouldn’t dream of trying to do any mechanical fix on a contemporary vehicle because of the complex electronics. So I too feel a warm nostalgic glow when I think about the simple machines of times gone by. 

But all those electronics give us a dozen conveniences that make using a car in one’s daily business far more pleasant than it used to be. They almost make cars safer, more economical, and more powerful. 

Until I see some coherent definition of quality, I won’t accept any argument that BMW (or any other car maker) is trading quality for something else (quantity, greater profit margin, whatever). 

What’s more interesting is the persistence of German car companies in outsourcing convenience components such as navigation to suppliers offering a clearly inferior product. But that’s a topic for another thread.


----------



## Starab (Feb 17, 2007)

ah, those olden days, things used to last for years and pass to next genaration.
Now,
They want your money, you to buy things more frequently
So, 
they can stay in business(their job security)
If,
the things lasts for years, you wont buy their products.


----------



## BmW745On19's (Aug 12, 2005)

I've noticed their quality start to suffer in the service department in the past few years too. They used to replace anything that was a problem, now you basically have to twist their arms back to get them to fix seriously malfunctioning equipment.


----------



## mercury26 (Oct 30, 2006)

Virginia Bill said:


> What's more interesting is the persistence of German car companies in outsourcing convenience components such as navigation to suppliers offering a clearly inferior product. But that's a topic for another thread.


It is next to impossible for a company to be an expert in design, engineering and manufacturing of all things. Typically, it is better to outsource certain items to get the efficiency of engineering and manufacturing resources. Look at a company like Motorola that makes consumer goods, but had huge chunk of business as a semiconductor engineering and manufacturing company. They realized it was unprofitable to try to excel in semi-conductors and consumer goods, even though many of their items used their own components.

Just my 3 cents.

Cheers,

Chuck


----------

