Comparative Analysis of BMW and Chevrolet Car Companies

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The following report features an in depth analysis and comparison of two major automotive giants being Chevrolet and BMW. This report aims to explore in depth the history, practices, management between the two companies, so that we can better understand how two vastly different companies dominate their field.

BMW

BMW is a German motor vehicle manufacturer that was officially found on the 7th of March 1916 and is now one of the leading car manufacturers in the world. Although during establishment of the company they were previously an aircraft engine manufacturer known Bayerische Flugzeugwerke AG and in 1922 they officially changed their name to Bayerische Motoren Werke.

The first product manufactured by BMW was a straight-six aircraft engine called the BMW IIIa, that was used in aero planes during World War 1. After the conclusion of WW1, BMW diversified their product line, now producing motorcycle engines, farm equipment, house hold items and railway breaks. It wasn’t until 1928 where BMW officially became an automobile manufacturer when they purchased Fahrzeugfabrik Eisenach which was a company at the time already producing cars. During the 1930s BMW extended their automobile range to now include bigger luxury cars as well as sports cars

An major factor that affected the rise of BMW was the beginning and outbreak of World War II in 1939. This is so as BMW were now required to manufacture war supplies now to the German army, which was done under the instruction of the German government. Due to BMW manufacturing plants now being under control of the German government and all efforts forced to go to the German army, a massive toll began to take effect on the company. This is so as to keep up with the constant military demand, enormous amounts of materials were used to produce their products as well as to ship them to the front lines. Additionally at the beginning of 1940 BMW how now begun to hire foreign workers within the company, due to minimal amounts of staff present, as most employees had been drafted into the German army. Furthermore in the mid 1940’s BMW resorted to hire prisoners of war as employee numbers continued to diminish, during these times the factories working conditions were the worse they have ever been in the companies history. These working conditions became so bad as efficiency was prioritized above all else and everything ranging from humane working conditions to safety was neglected.

After Nazi Germany was defeated, the Allied forces destroyed and dismantled all of BMW’s factories due to their contribution to Germanys war effort. This act by the allied forces almost put the company out of business for good. During this time BMW reverted to selling kitchen utensils and other form of cooking ware to keep the company afloat. After a few years of selling kitchen ware BMW was able to rebound and produce its first automobile again in 1951, with the car being a considered a luxury vehicle that seated 6 people. This car was titled the 501 and was able to restore BMW’s reputation within the automotive industry.

During the 1960’s and 70’s BMW began to rapidly grow, with expansion of the company now being the primary focus of the company. This expansion came in the form of BMW establishing its own financial subsidiary organization known as BMW Kredit, which allowed them to expand and develop the automotive leasing market which was only just beginning at the time of this implementation.

In 1972 BMW expanded overseas with the construction of their first manufacturing plant in Rosslyn, South Africa, which employed 1700 employees and exclusively produced 53,000 unit of the BMW series 3 model.

By the 1990s the BMW name and brand has become associated with that of wealth and luxury, with their production line now expanding sports cars and sedans. In 1994 BMW finally expanded into the United States, which saw them construcut a manufacturing plant in Spartanburg, South Carolina. During this expansion period BMW also began aquiring other companies, firstly the Rover group in 1994 and in 1998 the Rolls Royce group.

Currently the BMW automotive group has its sights set on further expansion, with the aspects of growth, new technology and profit being their main goal.

Chevrolet

Chevrolet is an American motor vehicle company that was started on November 3 1911 in Detroit by automotive engineer by Louis Chevrolet and William Durant. At the time Durant was head of the Buick automotive company and during this period Louis Chevrolet was hired to drive the cars he produdced in races in order to promote the brand. Chevrolet had their first car produced In 1913, this being the Series C classic Six. Additionally in 1913 Louis Chevrolet’s well known bowtie was adopted into the company logo, which was then implemented as badges on all of their products.

In 1915 Chevrolet owner William Durant acquired the rights to McLaughlin Motor Car Company, which currenly produced Buick cars in Canada. With Durant knowing this he was able to create the Chevrolet Motor Car company of Canada, under a specific franchise agreement of General Motors. Only three year later both Chevrolet and McLaughlin automotive were aquired by General Motors.

In 1916 Chevrolet had a become a major player within the American automotive industry, which then allowed Durant to purchase the majority share within General Motor. After the deal was completed in 1917, Durant became the President of General Motors America and ordered for Chevrolet to be merged into GM as a separate division.

After many years of GM on top of the automotive industry they finally made a break through in 1955, this being a small V8 engine. The design of this engine had a global effect on the automotive industry, with todays engines still using the basis of this design in their current automobiles. Additionally on top of the V8 engine Chevrolet were the first to introduce a fuel injected motor into their cars, which further propelled the success of the business with one in every ten cars being sold in 1963 being a Chevrolet.

Since 2010 Chevrolet has been operating in over 140 countries and set a record in global sales for over 4.76 million vehicles sold world wide. Although the US is the primary distributor of vehicles, Brazil and China follow close for second and third.

In 2010 GM began to research and develop the production of a Hybrid Plug in Chevrolet, which came to be known as the Opel/Vauxhall. This car design received multiple awards being car of the year in 2012 and was the best selling electric car in 2012 with 31,400 units sold.

The Major Environmental Factors Affecting Both Chevrolet and BMW

In the past decade society have become more knowledgeable and aware of factors that impact our environment, we find ourselves being more conscious of the choices we make in our everyday lives and how we can preserve our eco system in the most efficient way possible. Global companies have now marketed towards this move, increasing their involvement and providing solutions to contribute to creating a more sustainable environment. BMW and Chevrolet are two internationally renowned companies that have recognised the importance of sustainability. Companies like BMW and Chevrolet share partnerships with various campaigns that help minimise wast production and carbon emissions.

Managing Change and Innovation

For companies such as BMW and Chevrolet we need to look at what influences have and will make the most change in terms of design and revolution of their products. In the scope of this report we will specifically outline and discuss the influences of the consumer market upon the shaping of future electric vehicles, while also comparing strategies of the companies. In turn this should demonstrate how BMW and Chevrolet differ in managing change and innovation.

As one of the most predominant car manufacturing companies in European and overseas markets BMW has been attempting to widen their range of electric vehicles. From this they are attempting to hopefully lower production of all petrol vehicles and make way for more ecologically friendly substitutes. According to an article by ‘The Driven’ BMW announced it would be increasing production for ’25 new plug-in electric cars” to reach their new deadline of 2023 rather than the previously mentioned 2025.

Unfortunately, according to BMW executive Klaus Frölich European market customers are showing minimal interest in purely electric cars and believes that sales will not increase as a result of elevated production. To counteract this issue Frölich states that big offers and incentives will be required to sell these cars, although he is not optimistic on the capability of these enticements. In terms of marketing all electric cars it’s believed concentrating on regions such as China and California are the best option for retailing these vehicles as they display much popularity in these parts of the world.

Another issue that has befallen not just BMW but other car makers within Europe is the unwillingness to increase the production and sales of “cleaner cars” as to retain earnings from there much less eco-friendly alternatives. These highly profitable SUVs have given negative incentive to manufacturers of these cars to post pone generation of all electric vehicles just to keep shareholders content. However due to the greater demand for stricter legislation and taxation in Europe by the year 2021 car makers will pay substantial fines if certain fuel emission standards are not met. This enticement will ultimately force companies such as BMW to rethink their manufacturing and marketing strategies for new pure electric cars.

Chevrolet under the parent company General Motors (GM) has observed the market and realised that there are significant underlying issues with many all electric vehicles. Up until recently electric vehicles have been considered luxury items especially when you look at companies such as Tesla and how expensive their cars are, but this isn’t the only issue plaguing car manufacturers. It was stated by GM that they “currently lose money selling electric cars” alluding to the unprofitability of all electric vehicles. To counterbalance this GM have discussed making cheaper and more affordable cars but also putting resources into new and more efficient battery technology while attempting to reduce cost overalls. Batteries will however need to be produced at less than 100 US dollars per kilowatt hour just to remain profitable but GM expresses that they are on their way to meet this goal.

Chevrolet has also recently discussed production of an all-electric utility vehicle marketed towards larger families who need cars bigger than the usual small sedan. Although it has not been explicitly stated Chevrolet has in fact foreseen the eventual demand in larger electric cars for the general public and through this they will be able to fill that space within the market. Ideas such as this have put Chevrolet higher on the ladder in terms of innovating electric vehicles for the average person.

Recommendations for Improving Their Practices

Large car manufacturers are trying better to be more sustainable.
They have the resources to do so while influencing legislation.
Put more research into better batteries
Help improve infrastructure for charging points.
Make electric cars more affordable.

References

Schmidt, B. (2019). BMW unveils new electric vehicles, says Europeans don’t want them | The Driven. [online] The Driven. Available at: https://thedriven.io/2019/07/01/bmw-unveils-new-electric-vehicles-says-europeans-dont-want-them/ [Accessed 19 Oct. 2019].
Welch, D. and Bloomberg (2019). GM Is Planning Electric Cars That Won’t Give Buyers Sticker Shock, General Motors President Says. [online] Fortune. Available at: https://fortune.com/2019/06/05/gm-electric-cars/ [Accessed 21 Aug. 2019].
Lambert, F. (2019). GM unveils Chevrolet Menlo EV electric car – a Bolt EV utility vehicle – Electrek. [online] Electrek. Available at: https://electrek.co/2019/08/14/gm-chevrolet-menlo-ev-electric-bolt-euv/ [Accessed 19 Aug. 2019].
Wikipedia. 2019. History of BMW – Wikipedia. [ONLINE] Available at: https://en.wikipedia.org/wiki/History_of_BMW. [Accessed 26 August 2019].
History of the BMW. 2019. History of the BMW. [ONLINE] Available at: https://www.carcovers.com/resources/history-of-bmw/. [Accessed 25 September 2019].
media.gm.com. 2019
CHEVROLET – A BRIEF HISTORY. [ONLINE] Available at: http://www.gmplantnews.com/media/za/en/gm/news.detail.html/content/Pages/news/za/en/2010/Chevrolet/07_22_chevrolet_brief_history.htm. [Accessed 25 September 2019].
Wikipedia. 2019. Chevrolet – Wikipedia. [ONLINE] Available at: https://en.wikipedia.org/wiki/Chevrolet. [Accessed 25 September 2019].

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Comparative Analysis of BMW and Chevrolet Car Companies

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