BMW’s new CEO: Oliver Zipse

BMW’s new CEO was announced recently. Oliver Zipse will take over the wheel at BMW on the 16th of August. He is entering a turbulent era at BMW that has increasing concerns on many sides. Firstly, the younger generations demands have changed dramatically with the introduction of cars like Tesla that give emphasis on environmental factors and software. Secondly, there are shareholders who have concerns about the declining sales of BMW compared to Mercedes Benz. They are also concerned about BMW not being able to compete with Tesla when it comes to software and engineering.

BMW’s new CEO: Who is Oliver Zipse?

Oliver Zipse was until recently the production manager for BMW. This isn’t the first time a production manager is taking the wheel at BMW. Ex-CEO’s Norbert Reithofer, Bernd Pischetsreider, and Joachim Milberg were all production managers before they made the transition to the CEO position. Oliver Zipse joined BMW in 1991. He served BMW as a brand manager, product manager and as a production manager in Oxford. You can find out more about Oliver Zipse here.

He proved his skills by increasing the efficiency of the production facilities in Hungary, China, and the USA. Even with low sales figures, he managed to get high-profit margins due to being efficient.

Shareholders demands

Everyone is talking about Tesla these days, and so are the BMW’s shareholders. They demand the new CEO to be capable enough to catch up with Tesla’s sales and technology. They are also concerned about the increasing sales of Mercedes-Benz. Mercedes-Benz overtook BMW in sales in 2016. You can see recent sales figures here.

The rivalry between the brands has always been present and BMW was in the lead for quite some time. The bigger worry, however, is Tesla, shareholders are not hiding their fear and demands. They even stated, “Catch up with Tesla, or else…”. What they meant was catching up in sales and most of all in the technological aspect.

The right people for the job

BMW is on top of all things losing valuable employees which are the key to development. They lost their main electric vehicle specialist Christian Senger, who now works at Volkswagen. He actually became the head honcho at Volkswagen department for electric vehicles. They also lost Markus Duesmann, for whom people predict will be the next CEO of Audi.

Both were driven away from BMW by ex-BMW employee Herbert Diess, who is now the CEO of Volkswagen. Diess announced an 80 billion euro project for electrical vehicles at Volkswagen and simultaneously announced a strategic partnership with Ford.

Tesla: the king of electronics and software

According to UBS analyst, Patrick Hummel Tesla is at least 3 or 4 years ahead of german car manufacturers when it comes to electronics and software. He is worried that the Germans are just not ready for the complete electronic revolution.

The car world is changing faster than ever with giant companies like Google and Amazon investing and developing into the industry. Knowledge and software development is becoming more and more important. Car manufacturing use to be the main thing, now it’s just a piece of a puzzle. If a company doesn’t invest in software development they are in danger of becoming the “supplier of hardware” to those who invest and progress.

Oliver Zipse has a tough challenge to beat

An ex-BMW board member who wished to remain anonymous has expressed worries about BMW’s new CEO Oliver Zipse’s capabilities. He bases that on Zipse’s past experiences. Being an efficient and capable manager isn’t enough anymore. The main thing for the future will be predicting industry trends and adapting the company to those trends. Having good personnel will also a key thing to the development of a work culture that will be focused on the area of consumer electronics and internet dynamics.

For more BMW content check out our buyers’ guides!