BMW Targets More R&D Outsourcing

DETROIT – BMW AG says it expects in-house development of components and systems to drop to 45% by the end of this year, a sharp decline from the 70% level of less than a decade ago.

The German luxury auto maker says most of the increase in outsourcing will focus on the areas of electronic systems and technology.

Burkhard Goeschel, BMW management board member responsible for product development and purchasing, tells attendees at a Society of Automotive Engineers conference here the auto maker will form more partnerships with suppliers to gain better expertise in electronic- and electrical-system technologies.

“We are looking for partnerships that offer us access to the first innovators,” he says. “We (BMW Group) will focus our corporate resources on research and development functions that add value to the brand.”

Mini engine partnership example of BMW’s new direction.

Goeschel points to the successful partnership created between BMW and ZF Linksysteme to develop the active-steering system in the 5-Series as a good example of its vision for future supplier collaborations.(See related story: BMW Has 2-Year Exclusive for New Steering Innovation)

He says BMW also plans to further develop partnerships with other OEMs, similar to the alliance it has with PSA Peugeot Citroen to develop a new line of engines for use in future Mini vehicles.

The 1.6L engines will be produced in France for application in more than 20 different models, with output targeted to reach 1 million units per year. (See related story: PSA, BMW Fire Up First JV Engines)

Goeschel says while the engines will share the same basic design, the power outputs have been “tailored for each partner.”

BMW’s purchasing department also plans to become more partner-focused in its processes thanks to the development of a new department that will take direct responsibility for partner network purchasing activities.

He says the purchasing operation will focus on obtaining the most relevant technologies to help BMW build on its business plan to be “to market first” with breakthrough technologies.

Goeschel adds BMW plans to bring its supplier partners into the product-development process earlier, with some suppliers coming on board at the concept vehicle-development stage, depending on the system to be provided.

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