BMW “i” brand equity and a broken strategy

BMW founded the »i« sub-brand in 2011 for its first-ever release of plug-in electric vehicles. To this date, all of their electric vehicles are being released under this brand. Current models include the i3 and the i3s alongside the sportier and exotic-looking i8 coupe and roadster. The brand has recently been the talk of the town due to its troubles and axed models.

Brands awareness and beginnings

I will first try and break down the »i« sub-brands equity through the eyes of the buyer. Being a BMW sub-brand automatically conveys a message of quality and long-term tradition. BMW incorporated a sub-brand for the electric vehicles in order to pave a path for the future and to distance the electric vehicles from other diesel and petrol models. Seeing as how BMW is known for its long history of petrol and diesel engine innovation and development this was a big step both for BMW and their existing customer base.

BMW announced the »i« sub-brand two years before actually releasing any electric car models on public roads. They used this time to showcase the prototypes and build brand awareness through those events. But it was not only that, 2010-2013 were the early years of the electric car revolution and everyone was speculating whether this was the future or just a trend. By launching a separate brand BMW also showed that they are not saying goodbye to the great sounding and powerful petrol engines that their buyers grew to love. Being the first German car manufacturer that made a strong move into the electric car market also built awareness through media headlines and local marketing campaigns they are known for. Overall I believe the public, existing and potential new BMW owners were well aware BMW was preparing something new and futuristic. This was proven to be true as the electric cars rolled onto the roads, every automotive media was covering the release and also big shows like Top Gear did extensive reviews.

Brand image

I think BMW did not struggle with the brand image as much as they did with brand awareness when it comes to BMWi. BMW has a big and loyal customer base and even if you don’t own a BMW you know it is a premium German car manufacturer. That image translated to the »i« sub-brand which was no surprise. Compared to their biggest competitor on the electric car market, the newcomer Tesla had a lot more work with the brand image. Tesla was new and exciting but electric cars were still a niche market and building a positive brand image in the minds of the customer is a time-consuming process. BMW already positions itself with their slogan: »The Ultimate Driving Machine«. People believed that their electric vehicles would be nothing short of that. The slogan symbolizes power and the fact that you have to be a good driver in order to handle a BMW. And everyone wants to see themselves as good drivers.

Brand loyalty

When it comes to brand loyalty it is important to look at the BMW »i« brand as a separate entity. I would say BMWi didn’t earn loyalty from their customers as soon as they released their electric cars. The first buyers were rather big risk-takers and technology/environmental enthusiasts before they were loyal BMW fans. Loyalty comes with consistency and proof of good work. BMWi was BMW’s first step into the electric car world and loyalty seems to be an issue even in 2019. The opposite goes for perceived quality, it was generally taken that BMW would not risk releasing a sub-par product onto the market. They never did. Good quality and innovative engineering were always the backbones of the BMW brand. People expected nothing less from the BMWi vehicles.

What went wrong?

As I mentioned this brand because of recent reports which say the brand and its earnings are suffering. The electric car models that BMW offers under the »i« sub-brand consist of an exotic sports car that is not performing well not even in terms of power, handling, practicality and most certainly not in electric drive reach. Then there is the i3 which has a weird box-like design, that is nothing like other BMWs. The public was never impressed with its design even though sales were better due to its lower price.

BMW recently announced they were discontinuing the i3 and introducing the i4 (a small sedan) and an electric SUV. This makes their electric car lineup very confusing and even less affordable. All of these announcements are making people question the brands’ image and the people behind it. It is also no secret that BMW’s stock value steadily dropped since 2011. Competitors like Tesla are not only outselling them in electric car markets but also in regular markets with Tesla’s Model S outselling BMW’s 5 and 7 series.

One thing that also contributed to BMWi’s brand confusion is also the fact that their own development director said that there is simply no demand for fully electric vehicles in Europe. (Taylor M., 2019) This is not something you want to hear from a BMW executive with reports clearly showing that Tesla and Hyundai are selling fully electric vehicles with no problems. The problem is within BMW and their odd product lineup.

Future of BMWi

According to Michael Barnard, the chief strategist at TFIE Strategy Inc., the problem is with BMW’s brand drifting away from its roots and its inability to define its future. They stayed »The Ultimate Driving Machine« since the 1970s, but it has been a long time since their brand and products were following that slogan. When it comes to BMWi their best selling and most affordable i3 is the exact opposite of what an ultimate driving machine should be. What makes this even more ironic is the fact that Tesla is building the actual electric ultimate driving machines. BMW is spending time and money on developing complex carbon-fiber hybrid frames but their exotic-looking electric i8 is slower than most Tesla Model S and even the much cheaper model 3. It makes no sense and people started realizing that. BMWi’s future strategy is not showing any signs of improving the actual performance of their electric lineup. They plan on making every future BMW also available in a fully electric variant.

This is clearly not the right strategy, performance should be at the forefront of development (Barnard M., 2018). What the BMWi brand is missing is a story and a connection with its customers. They should listen to what people actually want, and I bet its not fancy and expensive composite carbon fiber frames. Putting it simply, they want what Tesla is doing but with the spirit and design of an M3 for example. It really is not that difficult, it just seems that BMW is trying too hard to make their cars look futuristic and revolutionary. Focus on reach, design, and reliability. That’s it.

Read more about electric vehicles here.