BMW Could Launch Fourth Brand

A possible new brand would spearhead the German luxury automaker's attempt to boost growth by offering more fuel-efficient vehicles

Luxury car maker BMW is looking at launching a fourth brand alongside the Mini, Rolls-Royce and BMW.

The new brand will spearhead BMW's attempt to boost growth following criticism that it is too focused on luxury gas-guzzlers. A spokesman said: "We are looking at what a new brand would involve; we are looking at quite different forms of transportation."

BMW aims to embrace new car styles and technology in a strategic push to address the problems faced by the world's expanding cities in dealing with emissions and congestion.

The German group has developed a fuel-saving technology that should make its cars 20 per cent more fuel efficient than those made by its competitors. It is also involved in hydrogen technology and is to launch a hybrid petrol and electric car in 2009.

Although speculation that BMW might buy Volvo as a fourth brand have been denied, chief executive Norbert Reithofer has stated that the company remains flexible should the right opportunity occur. However, no available brand meets BMW's growth and profits criteria.

On Thursday, Mr Reithofer unveiled a series of new models intended to raise profits. BMW has been highly successful with the Series 1 BMW and the Mini. These account for a quarter of all vehicles sold but do not enjoy the same margins as larger models.

New cars include a 4x4 version of the Mini and a coupé version of the Rolls-Royce Phantom as well as another smaller and cheaper Rolls-Royce. BMW itself will have two new models, the X1 and a four-door coupé based on the Series 5.

By 2012, BMW aims to increase annual production from 1.4 million to 1.8 million vehicles, and raise productivity and selling prices.

Before it's here, it's on the Bloomberg Terminal.