“We believe that, at the moment, the technical and social challenges involved are still too great,” said Klaus Froehlich, a BMW board member responsible for development, at BMW’s annual accounts press conference in Munich. “In addition, adjustments must be made to the legal implications for customers and manufacturers.”
BMW's new strategy, announced this morning, will focus on developing its range of electric vehicles and automated driving, as well as growing its business of high-definition digital maps, sensor technology, cloud technology and artificial intelligence.
The company is aiming to post a group pretax margin of at least 10 per cent from 2017 to 2020.
In the more traditional space, motorcycles and sports utility vehicles are set to be the big drivers of profitability, with new SUV models including the full-sized X7 as well as more versions of high-end models like the 7-Series sedan on the way.
The announcements sent BMW's share price up by almost four per cent by mid morning trade.
“We need to manage our current business to perfection, while continuing to grow in a targeted fashion, in order to secure the necessary investment,” BMW chief executive Harald Krueger added.
Last week BMW reported a record year for sales in the month of February, at 164,000 up 7.9 per cent year on year.
In the year-to-date, 317,000 units have been sold, an increase of 7.7 per cent compared with the same period last year.
“For us, strategy and profitability are inextricably linked,” said Friedrich Eichiner, member of the board of management responsible for finance," but he added “large-scale” production of self-driving cars will not happen for some years.
“Our financial strength today is the basis for our success tomorrow.”
The German luxury car maker has been building automated functions into its cars gradually over the last decade, including parking functions and various other augmented driver-assist functions, since it began testing the technology in 2006.
A BMW car successfully completed a lap of the Hockenheimring race track that same year and in 2011 a test vehicle managed the drive from Munich to Nuremberg without any driver intervention.