Pity German automaker BMW (BMWG). It spent 50 years building its brand image and competitive edge around cars that accelerate like a rocket and handle superbly at speeds upward of 120 miles per hour. No car whips out of a curve quite like a Bimmer. That was a winning formula until fuel prices soared and global warming made high-performance cars look like an endangered species.
The problem is, BMW can't rely on hybrids to boost fuel efficiency like rival Toyota and others because the handling of a hybrid is distinctly un-thrilling. To defend its position as global leader in premium cars, the Bavarian automaker now also needs to build green rockets—and its engineers already are churning out a slew of fuel-saving advances in combustion engine technology and other car systems to meet that goal.
The new BMW 1 Series three-door diesel is a showcase for BMW's clean-machine credentials. Not only does the car pack more power and performance but it has made big strides in fuel efficiency and slashed CO2 emissions 20%. The 177-horsepower compact, which hit showrooms in April, consumes an average 4.8 liters per 100 kilometers (57.6 miles per gallon). And yes, it sprints from 0 to 62 mph in 7.5 seconds.
BMW's hot new Mini Cooper S, which arrived in the U.S. this spring, has upped the horsepower to 175, increased torque, and still gets 18% better gas mileage. One hundred BMW engineers worked for four years on the Mini's new gas-saving engine technology, which BMW will deploy in other models as well. "It's a sheep in wolf's clothing," says Mini Marketing Chief Kai Segler.
And if small cars don't appeal, BMW is fitting the 6 Series coupe with a 286 horsepower engine that comes in at 5.75 liters per 100 km (40.9 mpg). That's benchmark for a performance coupe that does 0 to 62 mph in 6.3 seconds—and nothing to be ashamed about even if the neighbors are driving a Prius. Got a soft spot for big SUVS? The new BMW X5 SUV diesel comes in at 29 mpg, a 7% improvement over the previous model.
Sure, diesel engines typically outperform hybrids in fuel efficiency. That's no surprise. But even BMW's new gasoline models hold their own against hybrids. The gasoline version of the new 1 Series burns 20% less fuel than its predecessor, or 5.9 liters per 100 km (39.9 mpg).
Intelligent Energy and Hydrogen
BMW is also rolling out a raft of new fuel-savings systems called "intelligent energy flow management" that will rapidly become standard features on new models, such as brake energy regeneration, intelligent alternator controls, batteries that recycle previously lost energy, and automatic stop-start systems that switch the engine off when the car is stationary. The new manual transmission Mini tells drivers the ideal gear for maximum fuel efficiency through a digital display on the dashboard.
Of course for the long haul, it's no secret that BMW is betting on hydrogen cars—it's spent 30 years developing its hydrogen engine. Last fall, BMW launched a test fleet of hybrid gas-hydrogen 7 Series sedans, offering them to politicians and industrial leaders around the world to help build support for the costly build-out of a new hydrogen-fuel infrastructure (see BusinessWeek.com, 9/12/06, "BMW's H-Bomb"). California Governor Arnold Schwarzenegger has one at his disposal.
Hybrid on the Horizon
If hydrogen doesn't become the green fuel of choice in the future, or if global warming accelerates, BMW may have to switch gears. To hedge its bets, it's investing $130 million to develop hybrid engines in a two-year-old joint venture with DaimlerChrysler (DCX) and General Motors (GM). The first hybrid Bimmer will be launched in 2009—though the company won't say which model it will debut.
But so far, BMW's green strides are no less impressive than those by Toyota (TM), which pioneered the hybrid movement with its Prius model. Environmental demands may someday jolt BMW to take a more radical tack. That's one reason new Chief Executive Norbert Reithofer and his top lieutenants are immersed in a strategic rethink about BMW's future—the outlines of which will be revealed later this year. For now, BMW is busy transforming its racing machines into green streaks on the highway.
Click here to see a round-up of BMW's most popular models of all time.