[Brookside]

This is a short interview with Helmut Panke conducted by NYT's Paul Lienert and Michelle Krebs last December (2005)

Dr. Helmut Panke is chairman of the board of management of BMW AG. The 59-year-old Panke joined BMW in 1982 as head of planning and control in the R&D department after working as a consultant with McKinsey & Company in Germany. He has since held numerous positions with BMW, including chairman and CEO of its U.S. operations. His first stint in the U.S. was as a high school student at The Phillips Exeter Academy in New Hampshire on an American Field Service scholarship. He then earned degrees in physics from the University of Munich, where he eventually taught. He also worked at the Swiss Institute for Nuclear Research.


Will you bring the 1 Series to the U.S.?
Eventually, yes.

When?
Some papers speculate the end of '07; some say the beginning of '08…[the introduction] is tied to the addition of body styles. BMW is understood as premium, and a hatchback (like the current model sold in Europe) doesn't really fit on that level.

Is a three-box sedan more likely?
There are many alternatives. We have not given that away, but it's not going to be a hatch.

At the Geneva show in March you announced two new model lines — a crossover similar to the X Coupe concept built in Spartanburg, South Carolina, and a "space-functional concept," built in Germany. What more can you tell us about the space-functional people mover?
This vehicle is about space focused on the driver and passengers — more individual space, flexibility and versatility. For instance, if three of us were riding and we wanted to talk and spread out papers we could do that. It's not going to be a traveling office like a Winnebago, but it's something, whether it's four passengers or five — not eight or 10. We wouldn't sit in each other's laps, and could stow a mountain bike without dismantling it. It's more on individuality of use. Yet, it all combines with a dynamic BMW shape and design. It feels like a BMW to drive it. We will bring a BMW interpretation of what it means to have a new definition of individual space. This is one of the key messages behind that concept.

Will this vehicle be different from Mercedes-Benz R-Class?
Yes. If you step into the R-Class, you see that individuals, with exception of front row, don't have enough flexibility or individual space. When you are sitting in the second or third row of the R-Class, you make a compromise. You aren't sitting comfortably. The R-Class is a different direction.

What have you learned from competitors like Volkswagen and DaimlerChrysler about stretching your product portfolio?
We have learned one thing here in the U.S. that is clearer than in other parts of the world: In order to be successful, even in a tough competitive environment, you have to have a clear, authentic brand. You can't try to be something that you aren't. The ultimate driving machine has worked well in the U.S., and it will work well for new models. We are not diluting. We are sharpening and focusing. You have to be able to drive any BMW product blindfolded and feel immediately it's a BMW. Take [Mercedes-Benz] — the A-Class and B-Class have completely different driver concepts. They feel different from other three-pointed-star products.

Mercedes has moved into new and different product niches. Must BMW compete in these segments?
We have always found our own interpretations and niches. But we are in a different situation now. In the past, we were the challenger. Now we are more successful than other manufacturers. We are being attacked because others are not quite as successful as they used to be. It makes us the target in each of the segments we compete in. We have to continue to out-BMW anybody who wants to copy us. We have to be more courageous, adventurous from within. We don't wait for somebody else. The two vehicle concepts announced in Geneva: The space concept is based on the development that we see in the European market, and the other concept has no example in the market. That's why we decided we could do it.

What's the timing on those?
In about three years — near 2008.

Are either aimed at the North American market?
Initially, we'll have the biggest market for the combination of SAV [Sport Activity Vehicle]/sports car in North America, and we'll build it in Spartanburg. The space-functional one is focused in Europe — in Germany.

China is still a traditional sedan market. Do you see the Chinese going for crossovers?
China is a market where sedans are the most sought after. Cars are even more a tool to express to the outside — to your neighborhood — "I've made it." Yet, there is a sizable group that wants to move into the SUV or SAV direction. I predict there will be a specific Chinese interpretation of what will be attractive but may take five to 10 years before we see something.

China has talked about the hydrogen economy. What's your take?
This is something where the same 15 to 20 years will also apply. Chinese and Southeast Asian governments are talking about what can be done, what is their role, what is the manufacturer's role? In California, there's the hydrogen corridor — the first test ground. But each time I have meetings in Beijing, the Chinese officials have that on the agenda. When we were discussing the 2008 Olympics and expressed our interest in being a sponsor for premium cars, we said we would provide hydrogen-fueled cars. We did not get the nod. But it's part of the discussion.

What are your plans for a hydrogen-powered car?
We will introduce a new vehicle — a hydrogen-fueled 7 Series — in the course of the current life cycle of the 7 Series. We have not said what year it is. We are in the middle of the life cycle.