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BMW is in a serious fight. This is its secret weapon.

Chairman and CEO Harald Krueger tells BT how BMW's new concept car - a self-driving electric vehicle which will go on sale in 2021 - will transform its entire approach to cars

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(From left) BMW's Klaus Frohlich, board member in charge of development at BMW; Harald Krueger, CEO of BMW Group; and Adrian van Hooydonk, BMW Group's vice-president of design taking a photo-call with the marque's new iNext. PHOTO: BMW AG

Los Angeles

HARALD KRUEGER feels this is the most exciting time to be running a car company. "It's also the most challenging, because of regulations, because of the trade situation worldwide," the chairman and chief executive of BMW Group said. "But at BMW, I'm optimistic, because it's a chance to lead the game."

The game he means - the business of making cars and selling them - is changing fast. New emissions regulations threaten to make a century of progress in engine technology obsolete, while opening the door to ambitious new players such as electric car maker Tesla.

Meanwhile, robo-taxis that non-industry players such as Apple and Waymo are developing could make private car ownership irrelevant altogether.

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Speaking to The Business Times a day before the ongoing Los Angeles Auto Show, Mr Krueger said he spends as much time thinking about these new foes as he does about BMW's traditional enemies, such as Mercedes-Benz or Audi.

"There is no distinction between our classic core business or core competitors, and new competitors. If you look at Tesla or other companies, they are no longer small. And if you look at the Chinese startups moving forward in electrification, or the US startups, both are very serious," he said. "We need to fight for our customers and our brands."

For that fight, BMW's weapons are embodied by the Vision iNext, a concept car that Mr Krueger showed to the press at a closed-door session.

A self-driving electric car, the iNext will go on sale in 2021 with a target range of 700km from a single battery charge.

At Los Angeles, it launched itself, rolling quietly onto the stage with no one in the cabin. That emphasised that the finished car will come with Level 3 autonomy, which allows a human driver to take his hands off the controls and his eye off the road, but requires him to be on standby to resume driving.

Full autonomy, which requires no driver involvement at all, will be technically good to go but might come later. "There are still crucial legal and regulatory hurdles to clear before we will be able to drive fully autonomous in all cities, but we will have the technologies ready in 2021," said Klaus Frohlich, the board member in charge of development at BMW.

Calling the Vision iNext a "spearhead of innovation", Mr Krueger said its technology will be shared with BMW Group's other brands, Mini and Rolls-Royce. But for now its main task is to get people to imagine what life will be like in the era of self-driving cars. "BMW is about joy, driving and fun. But in times of more traffic, you might be in a position where you'd like to relax," he said.

That's when the driver can activate the car's self-driving abilities, which BMW calls "Ease" mode. The steering wheel and pedals then retract, and the front passenger headrest folds back to enable the occupant to engage with rear passengers, who lounge in a sofa-like chair. The iNext is meant to offer such a different experience from today's motoring that its designers sought inspiration not from cars, but from boutique hotels.

"When the car is driving autonomously, the passengers can turn towards each other and have an analogue conversation," said Adrian van Hooydonk, BMW Group's vice-president of design.

Nor are these ideas mere designer fantasies. "Everything you see here is a serious intention," Mr van Hooydonk told BT.

Features such as these mean the iNext isn't "just another" electric car, said Mr Krueger.

BMW's top executive also dismisses the idea that autonomous cars will consign car ownership to history. "I believe we will still have privately owned cars, especially in the premium segment," Mr Krueger told BT. "If you just go from A to B and transportation is the most important, then a mobility service can maybe reduce the number of cars that you sell to people. But our customers love emotion. They love driving."

To keep these customers interested, the BMW iNext will enter production with best-in-class acceleration, development chief Mr Frohlich promised.

"For BMW as a brand, you always need to make sure that the customer can enjoy driving," Mr Krueger told BT.

The car game may be changing, but for BMW, some of the old rules still apply.