Video: BMW's engineering obsession

CNBC
Phil and Pam Palisol bought their new BMW in San Diego – and then traveled 6,000 miles to Munich to pick it up.
By Anchor
CNBC
updated 7/14/2011 8:03:04 AM ET 2011-07-14T12:03:04

Most tourists to this vibrant, cosmopolitan city are drawn to its history, nightlife, beer and cars. For a few, the ultimate destination on the north end of town is the headquarters of Bavarian Motor Works — better known to Americans as BMW.

Next door, drivers make the pilgrimage to BMW World – the ultimate showcase for the car the company calls “the ultimate driving machine.”

For BMW fans, it’s a high-octane stew, whether they're interested in valves and torque or the sculptured lines of the latest models. Others, like Phil and Pam Palisol, have a more specific mission. They’ve traveled over 6,000 miles to pick up their new Bimmer.

The Palisols bought their car from a dealer in San Diego. But BMW’s “European Delivery Program” gives them a chance to tour the company’s high-tech home before picking up their new sedan.

“It’s just so futuristic,” said Phil Palisol on a recent factory tour. “It's amazing how clean it is."

BMW makes it a daylong affair: a kaleidoscopic immersion in production, engineering and innovation. Nothing about the Palisols' experience is left to chance. Their entire day was carefully engineered into a kind of theatre, like everything BMW does, with an attention to detail and design. That approach extends to the company’s architecture, its cars and the way it has chosen to grow.

By tightly merging engineering and design, BMW strives to build cars for people who see driving itself is a pastime, according to Csaba Csere, a former editor of Car and Driver magazine.

“The best driving machine means that it's sporty, that it's fast, that it has steering that as you're going around a corner and you hit a bump, it actually kicks back,” he said. “And you feel what's happening. Most cars aren't that way.”

The company’s goal – to make the “ultimate driving machine” - "is more than just effective marketing,” said Csere.

“It's actually what they do,” he said. “I think if you work at BMW in any capacity, and you've got a decision to make, you can sit there and say, ‘We're the ultimate driving machine. Which one of these decisions is going to advance that objective?’”

Some 95,000 employees work for BMW in 15 countries. In Germany, they’ve made more than two million motorcycles, in addition to cars. In England, the company owns two other brands: the Mini, the sporty car that began life as a British economy model, and Rolls-Royce, a car at the high end of luxury with a price tag to match.

BMW says that no matter the price, marketing segment or number of wheels, the products they make will be “premium” vehicles that are fun to drive. But getting there requires a bit of fixation.

“There are parts of BMWs where in fact the basic design of the component is not extraordinary,” said Csere. “But the way it works is extraordinary. And that goes down to the guys who spend the time driving the cars on the test tracks, and the rough roads and trying out 7,000 shock absorber combinations until they get the one that works perfectly.”

Uwe Ellinghaus, BMW’s director of brand management, admits that sometimes those engineers can go overboard in their attention to detail.

“Clearly there is a certain level of overengineering that we have where we pay so much attention to detail that we might even get lost sometimes and overdo things,” he said. “We once found out that, for example, some of our pedals are painted four or five times. That's a couple of years ago. And we asked what's the difference by doing it only two times or three times. And nobody could really tell.”

Not everyone is a fan. David Champion, director of automobile testing for the non-profit Consumer Reports, thinks BMWs are sometimes overengineered.

“Those simple things like just tuning the radio ... is sort of like a five-step process to try and get through,” he said. "That sort of complexity, I think, is very annoying.”

Champion admits BMWs can be great cars to drive. But he says the company’s technical prowess hasn’t cured the cars of some significant reliability issues.

“We see Lexus, Infinity, Acura, all competing in that same marketplace,” he said. "And they all have better reliability.”

Whatever BMW’s problems, they’re apparently not hurting sales. In 2010, the BMW Group dominated the premium car market, selling more than 1.2 million luxury cars worldwide. But its competitors aren’t standing still. Audi, the No. 3 brand behind Mercedes, has brashly declared that by mid-decade it will take over BMW’s No. 1 spot.

At the Detroit auto show in January, BMW’s head of sales and marketing, Ian Robertson, said he didn’t feel threatened by Audi’s challenge.

“I don't particularly like to mention any competition,” he said. “The one thing I'd say is, we live in a very fierce and competitive world. And that's what makes it so exciting.”

Audi does seem to be treading common ground in the way it markets its models: BMW’s 3, 5 and 7 series are matched by Audi’s A4, A6 and A8.

Imitation? BMW’s Robertson has a stronger word for it.

“They say that plagiarism is the sincerest form of flattery,” he said. “There does appear to be some sort of looking over our shoulder."

Looking down the road, BMW may have the most to fear from its own success. If you’re an exclusive, luxury brand and drivers begin to see your cars everywhere - how exclusive are you really? Ellinghaus says he’s not worried.

“More and more customers say ‘As long as this brand appeals to me, as long as this product is right, I don't care how many people in my neighborhood are able to afford this car,'” he said.

As for the Palisols, they said they weren’t concerned about the brand’s appeal. They were just eager to see their new car. BMW makes sure the moment is memorable: a triumphant walk to a revolving platform bearing their car in “imperial blue” splendor.

“When (Phil) stood there and looked at it, it was just sort of one of those moments where you just want to kind of capture and hold onto the moment because it goes so fast,” said Pam Palisol. “And now it's an old car. Once he drives it out of here, it's a used car, right?”

© 2012 CNBC, Inc. All Rights Reserved

Discuss:

Discussion comments

,

Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 4.36%
$30K home equity loan FICO 5.07%
$75K home equity loan FICO 4.50%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 10.86%
10.86%
Cash Back Cards 16.41%
16.40%
Rewards Cards 15.95%
15.96%
Source: Bankrate.com