Cycle News - Archive Issues - 1980's

, . . - -- - - - - -- - -- - - - - -- - - - - - - - - -- - - - - - - - - - - - - - - - - ..., 0 « a: a: ~ ::E """'-_~, ., 3: J1\'=~~~. .... ~ ~ - ", w a: :J o U <~. ,,. _.."t C'J o z « :I: '~, p~ ~ .... a: -' QJ :J Z ..0 :I: o .... u o .., ". o '" o '" .... 0 0 :I: 0. BMW K75 triple c rankshafts await drive gear m a chining. BMW's new K75S. with a frame-mounted sports fairing . will be available in the U.S. in the spring; the K75C will be ava ila ble late this year. (Below) The BMW factory in Berlin . Two-wheeled operations lose money Why BMWbuilds Dlotoreyeles By Jo hn Ulrich PRIEN, WEST GERMANY, AUG. 30 BMW loses serious money building motorcycles, and there 's little chance the losses will end in the foreseeable future, according to so u rces close to the company. But there is equally little ch a nce that the company will stop building and selling motorcycles, according to the sources and to 12 BMW Motorrad spokesmen , even though the motorcycle d ivision is heavily subsidized by BMW 's carbuilding operations. " BM W entered the motorcycle world at a relatively late point in time and is now one of th e oldest manufacturers still in exi stence, " BMW Motorrad Chairman Eb erhardt C. SarIert told reporters at the BMW K75 750cc triple press introduction held in West Germany. " Yo u probably know that last year BMW produced approximately 432,000 cars and 34,000 motorcycles. Among the o verall work- force of BMW with a bo ut 45,000 em ployees, onl y about 2200 work for the motorcycle ,a nd th e share of the mo torcycle in BMW's overa ll turnover is n ot even 5%. How ever, it would be totally wro ng to judge th e act ua l signi ficance o f th e motorcycle for BMW merely on th e ba sis of these figures. Because the con tribu tion ofthe motorcycle to th e image of the compan y is mor e sign ifica nt than its econo mic contribution. " O n two occasions - 1923 a n d 1948 - motorcycles marked a new beginn in g in the history of our comp an y," Sarfert said, referring to BMW's start as a motor vehicle manufacturer in 1923and its rise from wartime as hes in 1948. "And in both cases this production of mot or cycles developed into the production of cars ex ported to th e four corn ers of th e globe. Desp ite th e domin at ing rol e of the a utomobile, h owever, th e motorcycle h a s never become a kin d o f byproduc t for BMW . Because BMW has a lways rem ained faithful to the motorcycle event in the 1960s when the mot or cycle was replaced by th e ca r in its fu nc tio n as a mere means o f transport. " As o ne o f the last surviving mot orcycle ma n ufacture rs in Eu rope, we were also in the market wh en th e motorcycle experienced its renaissance as a leisure-time and hobby act ivit y in the 1970s. We therefore participated in th is o u tsta nd ing motorcycle boo m and rem ained success fu l in a market dom inated to a degr ee o f more than 90%by th e four motorcycle gi ants from J a pan - a market tha t has been faced with substa n tia l problems in recent years . "It is quite o bvio us and logical tha t we have recentl y invested all of our potentia l a t BMW in the a u tomobil e," said Sarfert. " Precisely th is, h owever, has a lso p rovided th e foundations for th e surviva l of th e (BMW) motorcycle. After a ll, we a t BMW have a long tradition in the motorcycle market to wh ich ·we al so rem ained faithful wh en th e motorcycle was more of a ta lisma n than a promisin g econo mic prospect. " Sarfert went on to tell reporters tha t BMW has bu ilt mor e than 600,000 flat-twin motorcycles since th e introduction of th e R32 flat-twin in 1923, and a nother 220,000 single-cyli nder ma chi nes bet ween 1927 a nd 1965. In 1981 al on e, p rior to the introduction o f th e KIO four-cylinder. Sa rfert exO plained, BMW built 33,120 fla t-twins. " In 1979, BMW had to decide if it sho u ld stay in the mo torcycle business," Sarfert said a t th e p ress con ference. " BMW decided to move ahead in th e motorcycle world." Con tinuing. Sarfert said , " Considerin g th e fact th a t th e mot or cycle ma rke t is domina ted by th e Japanese and is becoming more difficult all th e time, we were naturall y faced with the questi on of whether it would be sensible for a German manufacturer to bu ild mot orcyclesat all. And whether the medium a nd long-term forecasts would justify our investments for expanding an d modernizing our production facil ities in Berlin." The Berlin factory was key to th e decision. The plant was alrea dy running close to its maximum, none-tooeffic ient capaci ty of 32,000 bikes a year wh en th e decision had to be made to cont in ue building motorcycles or to a ban don motorcycle production. To contin ue, the com pan y needed a new range of machines and a modern, state-of-the-art factory; better p rod ucti vi ry was needed to low er p rod uct ion cos ts and make building motorcycles eco nom ica lly viable. The ca tch was that, to j usti fy th e cos t of revam p in g and expa ndin g the factory, BMW would need to sell more mo torcycles per year. The marketing dep artment was assigned the task of determin in g sales pot ential for a new 1000cc four-cylinder and 750cc threecylinder in each country. As one source invol ved in the researc h tell s it , man th s of work produced an a n n ua l sales prediction of 48,000 motorcycles a year. But when th e report detailing th e research and its concl usions was sent to BMW Mo torrad managem en t, it came back a lmos t im media tely with a no tation fro m o ne of th e top managers. " We h ave to be a ble to sell 60,000 units a year or else the Board of Director s will n o t a p prove the money for modern ization o f th e Berlin factory, " said th e writing on the report. "Adjust the figures." The mark et research ers went back through th eir report, juggled the fig ures for each market, and resubmitted it. The report was taken to the Board of Dirctors, and BMW com mitted to what would later total an i n ves t m e nt of DM 300 million ($111,270,000) in revamping the Berlin factory. Before the factory was finished, BMW Motorrad management announced that the decli ne of the

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