During the 1950s, the BMW line-up consisted of luxury cars with displacements of two litres or greater, economy cars powered by motorcycle engines, and motorcycles. With their luxury cars becoming increasingly outdated and unprofitable and their motorcycles and economy cars becoming less attractive to an increasingly affluent society, BMW needed a car in the 1.5 to 2 litre class to become competitive. Prototypes powered by a 1.6 L engine based on one bank of the BMW OHV V8 engine were built and evaluated without a convincing result.
In 1960, the "Neue Klasse" project was begun.
The team was to produce a new car with a new engine, which BMW had not done since the 303 in 1933.
The prototype was introduced in September 1961 at the Frankfurt Motor Show as the BMW 1500 four-door saloon,
alongside the BMW 3200 CS, the last BMW with the OHV V8.
The term New Class referred to the 1.5–2–liter class of automobiles from which BMW had been absent since World War II.
It makes you wonder... why? Is it because of financial troubles? Possibly, although the BMW Group claims it's a move towards a more sustainable business model. BMW automobiles are currently built with roughly 30% recycled materials, and they're looking to ramp that up to at least 50% in the next few years, and they are working on electrified models that are made from 100% recycled material. They also plan to have a fully-electrified vehicle fleet by 2030.
They're very proud of their commitment to recycled material and CO2 reduction, which is great, however they're also on board with the notion that electric vehicles don't harm the environment at all, which is intellectually derelict both from a production standpoint, as well as during their life cycle.
From a financial standpoint, BMW (like many other auto makers) took a big hit during 2020 due to a stalled economy and supply chain issues, most notably the shortage in micro chip sets, which caused production issues. During the second quarter of 2020, The BMW Group reported
negative
growth of 23.9%, and their quarterly profit was down nearly $12 Billion from the fourth quarter of 2019.
They responded to these losses and supply chain issues by targeting their manufacturing focus on their higher profit margin vehicles, much like some other car manufacturers. In doing so, the BMW Group rebounded quite nicely, reporting a 56.59% quarterly growth rate a year later, in the second quarter of 2021, they also increased quarterly profits by about $12 Billion in that same quarter.
However, their growth rate has been single digits since then, and their reported profits, although still in the twelve figure range, have stagnated. They're making some obvious moves to shake things up, including the purchase of Alpina, the brand of a longtime builder of higher-performance versions of BMW cars, some of which have been offered from time to time via BMW’s own dealership network. The Alpina brand will eventually become an in-house trim line for BMW, similar to the AMG brand at rival Mercedes-Benz.
They also plan to share some of their profit with shareholders. The company said that it will propose an annual dividend of 5.80 euros per share, up from 1.90 euros in 2020, as well as a new share repurchase program, which is great news for current investors, and will likely inspire new potential investors as well.
Ultimately, I think the BMW Group is making an effort to really shake things up in the next couple years, and get ahead of the curve in terms of the global push (or force) to electrified vehicles, both from a marketing standpoint as well as a production standpoint. It's a restructure in every aspect, one that could potentially, (again) cement their identity as a "new class" of auto manufacturer.
