BMW’s 3-Series: Managing Platform Design and Development Costs William R. Boulton Auburn University Michael Dowling University of Regensburg BMW’s philosophy is to build driv- The overall styling of the 3-series was England’s little Austin Seven. As BMW’s ing machines that respond faithfully and especially important, and was a limiting first automobile, it was known as the 3/ enjoyably to their driver’s commands factor in its design. Models built on the 15 or “Dixi.” In 1932, a new, larger model while also providing the safety, practical- new platform had to look like a BMW called the BMW 3/20 was introduced. A ity, style, quality, reliability, and durabil- and be recognizable on the highway. year later, BMW introduced its first sports ity that help make long-term ownership a Focus groups were used to identify the sedan, a 6-cylinder model called the 303. rewarding experience. It was BMW’s basic design features that made a BMW In 1934, the 303’s engine was enlarged policy to develop new platforms for its recognizable, and those traits were main- from 1.2 to 1.5 liters, and the model-nam- series of cars every 7 to 8 years. New tained in its design. For example, the ing system was instituted with the 315/1 platforms were not simply modifications, BMW logo and “double kidney” grill sports roadster. BMW’s 6-cylinder engine but completely new structures. Accord- were key recognition factors. The 3 se- was progressively enlarged, to 1.9 and ing to Friedrich Nitschke, manager for the ries position in BMW’s product line set then to 2.0 liters, and finally to 3.5 liters. BMW 3 series development project, there many of the basic characteristics for the After World War II ended in 1945, were three goals for the new 3 series plat- new platform, and would determine the BMW’s Eisenach plant, where all BMW form that came to market in the 1999 basic characteristics of the models using cars had been produced, was in East Ger- model year. First, it was to generate the the new platform. For example, the di- many. BMW rebuilt its bombed-out highest level of customer satisfaction in mensions, engines and transmissions be- Munich plant and began production of its class. Second, it was to utilize the best came part of its target definition. motorcycles, then tiny hybrid cars, called processes available within BMW. Third, the Isetta, powered by motorcycle en- it was to generate the most profit of any Building on Tradition gines. Within a decade, BMW introduced BMW series. sedans and roadsters with V-8 engines, Developing the successor to the third- The Bayerische Motoren Werke (Ba- including the 507, one of the Europe’s generation of 3 series was a real chal- varian Motor Works) was created in 1916 most coveted postwar collector cars. lenge, since it had been an extremely suc- through the merger of an aircraft maker BMW introduced the 1500 family car cessful series. BMW’s chief designer and a manufacturer of aircraft engines. in 1962, with responsive overhead-cam- Chris Bangle explains, BMW’s first notable success was the 6- shaft 4-cylinder engine, front disc brakes There are two ways of doing car de- cylinder BMW IIIa engine, which in 1918 and 4-wheel independent suspension. sign. Either it’s a personality cult, powered a biplane to 5000 meters alti- Germany’s unlimited driving speeds en- where the designer runs the show and tude (16,405 feet) in just 29 minutes. Its couraged BMW to introduce a perfor- the car is just an ego toy, or the stylist impressive performance led to strong de- mance model as well, thereby beginning is more the curator of a heritage and mand for BMW engines. In 1919, a BMW’s modern sports-sedan tradition. tradition. Then, the challenge lies in BMW-powered biplane set a world alti- The BMW 1500 spawned a smaller 2- understanding a marque so well you tude record of 9,760 meters. door version and the 2002, which intro- become part of it. It’s quite clear my In 1922, BMW produced a small en- duced Americans to BMW’s sports-sedan job here is to perpetuate a set of icons. gine for the Victoria motorcycle, and a concept. A new 6-cylinder version, like Bangle’s latest platform introduction big truck engine with an advanced over- the Bavaria sedan and 3.0 CS coupe, were had been the redesign of its 5-Series, as head camshaft. BMW introduced the introduced. shown here. BMW R32 motorcycle in 1923 using the Since 1975, BMW has referred to its BMW Boxer engine [a horizontally op- smallest line of cars as the 3-Series. The The BMW 528l posed twin-cylinder engine], rear-wheel first 3 series achieved higher performance drive, and a double-tube frame. Its pio- with its 6-cylinder engine. The second neering technology was still used in the generation provided more choices, in- four R1100 series models introduced in cluding 4-doors, convertible and touring 1993. models. The most successful third gen- In late 1928, BMW acquired the eration raised driving performance to an Eisenach Vehicle Factory, which pro- even higher level, while providing qual- duced a single licensed model of ity comparable to Mercedes-Benz. The 1/3 September-December 2000 25 fourth generation would again undergo a redesign of the various models in the se- ries. The first models to change were the sedans, next the coupe, then the convert- ible and hatchback, and finally the wicked M3 sports cars. This sequence of intro- ductions allowed BMW to extend the life of the design by stretching out introduc- tions over the life of the series. The cur- Figure 1: BMW’s Product Development Process rent 3 series design had been in produc- tion since 1990. The styling of the new 3-series would be similar to the larger 5 ing dropped from use in the sedans. Over complained about its cramped rear seat and 7 series cousins. the new platform’s life, existing models and sub-par interior. The hard plastic in- would be replaced by the new platform, terior was heavily criticized. New com- BMW’s Forth-generation and then beefed up as an M-type model. petition from Lexus, Infiniti and 3-Series Platform Mercedes caused customers to question Setting the budget. spending upwards of $40,000 on a car that Development had a second-rate interior. The top-down target cost budget for As one journalist said of the third gen- Conjoint analysis, shown in Appen- the project was set as shown in Figures 2 eration models, “BMW’s beautifully pro- dix 1, revealed that safety and road be- and 3. BMW’s marketing department portioned 3-series cars are still the design havior were the two most important fac- set the price range for the 3 series between pacesetters in this realm” of small sport tors in purchasing a new vehicle. Since DM 40,000 and DM 60,000, pricing the sedans. Friedrich Nitschke’s challenge the early 1990s, BMW had invested compact 316i at around DM 42,000, and was to develop the fourth-generation of heavily, producing the safest and best the 328i sports sedan at around DM BMW’s pacesetting tradition. In addition, driving machine on the market. For ex- 60,000. At these prices, marketing esti- Nitschke was assigned the task of imple- ample, by 1997, BMW planned to have a mated sales between 2 million and 3 mil- menting a new planning system for head protection system above the front lion cars over the platform life. Manage- BMW’s 3 series replacement platform. doors and within the A-pillar of its 7-se- ment then set the target revenue and profit He explained: ries, which inflates an airbag diagonally level required for the series at 3 million I was given responsibility for devel- across the side window. Rear side units. Mr. Nitschke explained: oping the new 3-series BMW in 1993. airbags, and driver and passenger side This strict product development pro- This development process (Figure 1) airbags were planned for 1996. Dual cess was introduced with the 3 series was introduced in BMW for use in the threshold deployment was an “intelligent” in 1994. We would not start the devel- new 3 series. The target definition safety system that kept airbags from de- opment of the 3 series until we were gives the basic characteristics of the ploying at a lower crash severity if seat sure that we could make money with new platform for the series. belts were worn. Passenger seat occu- this car. That means that the plan’s Separate teams designed the saloon pancy sensor recognizes if a seat was cost and target cost needs to be nearly (sedan), coupé, compact, touring, con- occupied or not. Interlocking door an- equal. In the past, we might have some vertible, and M3 sports models to be in- choring system anchors a diagonal alu- difference, but we would start the R&D troduced on the new platform. Models in- minum reinforcement bar to the body pil- process in hopes of finding ideas to cluded two or four door versions of fam- lar in the event of a serious side impact. reduce costs. Therefore, we wouldn’t ily and sporty cars. For example, the ex- The newest systems were typically of- meet target profits and would have to isting lineup included: fered on the 7- and 5-series first. implement cost reduction projects as Benchmarking the existing 3 Series, the Saloon (316i, 318i, 323i, 328i, 318tds, soon as we introduced the new car.