BMW Doubles U.S. Headquarters; Considers New Small Car for Market

WOODCLIFF, NJ – BMW of North America LLC CEO Tom Purves cuts the ribbon this week on a $100 million addition to its headquarters here.

He says 1,000 people will work in the new structure that will house a national training center, regional sales offices and engineering personnel.

“These new facilities represent BMW’s long-term commitment to America, to New Jersey and the region where we draw our talented workforce,” says Purves, who will be leaving in a few weeks to lead Rolls-Royce Motor Cars in England after nine years as chief of operations here.

The new building will bring BMW’s total headquarters space to 550,000 sq.-ft.(5,100 sq.-m.) on 85 acres (34 ha). Previously, personnel were scattered in buildings throughout neighboring towns.

About 30% of BMW’s cost for its new south-campus expansion was spent in remediation of the site that previously was a fruit orchard. Workers had to remove 18 ins. (46 cm) of top soil to get rid of chemicals used on the trees. More than 1,000 new trees have been planted to create a park-like campus.

BMW also dedicated a garden within the new campus to Linda Gronlund, a former BMW employee who died on United flight 93 during the 9/11 terrorist disasters.

BMW most successful European brand in the U.S., executive says.

Ian Robertson, BMW AG’s board member for sales and marketing, joins Purves in the ribbon cutting, saying the auto maker will continue to invest in the U.S. “The footprint we leave here will be (present) for many years to come,” he says.

Robertson says the U.S. is BMW’s largest market, with sales of 290,000 BMWs, 400 Rolls-Royces and 40,000 Minis in 2007.

“We are the most successful European brand in the U.S.,” he adds, promising there is more investment to come. “We have very big plans for the U.S.”

The premium car segment in Germany has a 30% market share vs. 14% in the U.S., Robertson says, indicating there is still room for the luxury segment to grow here.

However, he admits BMW faces headwinds this year because of the weak dollar, the U.S. banking crisis and ensuing credit crunch. Rising fuel costs and raw material prices are adding to the difficulties. “But BMW is weathering these storms,” he insists.

Robertson views the U.S. as the most expansive premium market in the world. “We see the U.S. maintaining its lead even if India and China show a higher percentage of growth. The U.S. remains our key focus center of growth over the long term.”

However, he declines to forecast whether the year’s second half will see improved sales. “We remain very cautious. I don’t think the (bad) news is all out. BMW will adjust its production schedules according to market demand.”

At the same time, BMW has no plans to hold back shipments to the U.S., despite the weak dollar. “Nobody knows what the euro will be (worth) next year,” Robertson says.

He also says there are no plans to source more vehicles for the U.S. from South Africa.

Meantime, BMW is studying what future vehicles would be appropriate for the U.S. market, including a new, small city car. No decisions have been made on its powertrain or what the car should look like.

The German auto maker recently created a separate group, called Project I, to look at the options for the new model. Ulrich Kranz oversees the operation, with about 100 employees in his group.