Swot Analysis

Opportunity

When BMW drive its new 340-horsepower twin-turbo sDrive35is version of the Z4, due this spring, out onto the floor at the Detroit Auto Show, the company proudly proclaimed that the supercar has the same grams per kilometer carbon dioxide profile as the standard Z4 roadster.

But it's quite likely that many of the American journalists in attendance had no idea what Ian Robertson, a member of BMW's board of management, was talking about. After all, the darned thing goes zero to 62 mph in 4.8 seconds.

One of the challenges for a German carmaker is reconciling environmental standards crafted for the European Union and those of its other markets, especially the ultra-important U.S. (more than 20 percent of world sales). The EU has dictated strict CO2 rules of 130 grams per kilometer. They phase in, and 65 percent of each manufacturers' new cars must be in compliance in 2012 (75 percent in 2013, 80 percent in 2014 and 100 percent after 2015).

The U.S. has incorporated such regulations into its Corporate Average Fuel Economy(CAFE) dictates, also kicking in circa 2012. The U.S. regs aren't as demanding, especially in the early years, they're expressed differently, and the American press has yet to focus on their implications.

One of its biggest challenges is convincing Americans to buy diesels. As a key player in BMW (and other German carmakers') green strategy, diesels remain a tough sell for American customers who prefer the environmental message of hybrids (a late addition to the BMW fleet, with the X6 and hybrid 7-Series). Still, Robertson said that one in three U.S. BMW X5 customers is now buying a diesel, thanks in part to an aggressive marketing strategy that includes loaning them out to consumers whose cars are in the shop. "We are evaluating more diesels for the U.S.," Robertson said.

BMW sold 1.29 million cars in 2009, a 10.4 percent drop from 2008. It sold 216,000 Minis and 1,000 Rolls-Royces (many in the Middle East of course, though...