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      12-30-2021, 07:09 AM   #1
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New Interview With BMW CEO Oliver Zipse

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BMW boss Zipse: "6000 additional jobs next year" - and a promise to Munich

The Munich-based car manufacturer BMW is planning a significant increase in staff in the coming year in view of the booming sales figures. This was announced by BMW boss Oliver Zipse in an interview with Münchner Merkur.

Munich - 2021 was a difficult year for the auto industry. The switch to electromobility, a lack of chips, disrupted supply chains and high prices for important raw materials made life difficult for vehicle manufacturers. How serious the situation is for the industry and what challenges BMW is preparing for in the medium term, Group boss Oliver Zipse explained to Münchner Merkur.

Mr. Zipse, the auto industry is suffering from a shortage. Above all, it is about missing chips and disrupted supply chains. How is BMW doing?

It is of course a challenge to stabilize the supply chains. On the other hand, there is also a balancing effect: the demand is currently higher than the supply. This leads to price stabilization. The problem for us is not the deficiency itself, but rather the unpredictability. If we knew three months in advance that certain chips were not available, that would be less of a problem. In some cases, however, we only know a few days in advance.

Can you convert a production facility in a few days?

Yes, BMW has adjusted to it. The short-term nature is a real challenge, but we are set up so flexibly that we can deal with it. We have agreed with our social partners that we can cancel shifts at short notice in such cases, and working hours will then be reduced via the working time accounts. And we can start up again just as quickly. For decades we have geared the company towards maximum flexibility. It's no walk in the park, but we have a team that moves with us - because they recognize the need. That makes BMW strong.

But you are currently unable to meet demand in the short term.

We could sell more cars, that's right.

How long do you have to wait to order a new car?

That cannot be said across the board, it depends very much on the market situation and model. We have such strong demand for the i4 and iX that it can currently take a few months longer.

What is the cause now? The shortage or the high demand?

The combination of both. Here at the Munich plant, we are planning extra shifts for the i4 because the market demand is so high.

Do you have any indications as to when the shortage in semiconductors will be remedied?

That depends on the investment cycles of the semiconductor industry. If the demand is greater than the production capacities, investments are made. These cycles are 18 to 36 months. So the situation should slowly relax from the second quarter of 2022. And I assume that by the end of next year we will see largely normality.

There is also a lack of important raw materials. Will that be the bigger problem in the long run?

It is not new that individual raw materials cannot be delivered; there have always been market fluctuations. The topic of supply chains has come into focus for several reasons. The first is the discussion about semiconductors. The second is the focus on sustainability: where are the components made? Where do the raw materials come from? That is why we no longer source cobalt from the Congo, but from Australia. But we do not see any bottlenecks in either battery raw materials or classic raw materials that cannot be resolved.

You showed a completely recyclable concept vehicle at the IAA. Is that the near future?

It doesn't work overnight. But what is happening is a rethinking: 40 years ago, for example, hardly anyone thought about insulating houses. Today this is a matter of course. The first thing that happens when we have a shortage in one place is: You use it more sparingly. Regardless of whether it is heating energy or raw materials. That is why circular economy is a megatrend for us. We cannot do without all raw materials, but we are increasingly reusing them.

Is it worth it?

Humanity consumes around 100 billion tons of raw materials each year, almost all of which are taken from the upper layer of the earth. For reasons of sustainability, but also from an economic point of view, we cannot continue doing this forever. Efficiency, avoiding waste is a basic principle of industrialization. We are driving this topic forward and are now expanding it to include supply chains and raw materials.

Up until now, a car had to be as light as possible and as stable as possible. Soon it will also have to be recyclable.

It's not that new. In 1991 BMW already had a dismantling line at the Landshut plant. We pushed the topic once again with the i3, already included recyclates in the product design and thought ahead about recycling batteries. Now we are taking that experience to the next level. That is why we presented the BMW iVision Circular at the IAA, which is made from 100 percent sustainable raw materials and can also be 100 percent recycled.

By when will it be marketable?

Today we have a 30 percent share of recycled material in the vehicle. With the new class and our next vehicle architecture, we are moving towards 50 percent. And in perspective I can even imagine 70 or 80 percent.

What is the biggest problem?

The availability of recycled materials is currently the bottleneck. The necessary scaling has not yet been achieved here. Coated materials that cannot be separated again are particularly difficult in the recycling process. This is why vehicle development is so important for later recycling. We try - wherever possible - to do without coatings and to rely more on monomaterials.

What role do renewable raw materials play?

That is the second important aspect: that we have an alternative to non-renewable raw materials. In the vehicle structure it will hardly be possible because the crash requirements are so high. But wherever it comes to fibers, textiles, haptics, that's where we will use them.

Does that mean: fields and forests are also part of your supply chain?

I've never heard the phrase like this before. But now that you have said it: Definitely yes. Why not?

How far do you have to think ahead with such developments?

Everything we decide now must endure beyond 2030. Because you cannot radically change a basic product strategy every few months. At the same time, the framework conditions are changing faster than ever. With the ramp-up of electromobility, we are, for the first time, directly dependent on the infrastructure. In the past, our customers never had to worry about whether there were enough petrol stations. The topic of sustainability will also have a completely different relevance: In future, the auditor will determine whether statements on sustainability are really reliable or just greenwashing.

On the electrical infrastructure: is it growing fast enough?

Our i4 is sold out for months, as is the iX. The electric 7 Series is coming next year, so it won't be any different. The market is currently growing rapidly, but if the infrastructure doesn't keep up, this growth will be stifled. That is why we have analyzed for ourselves: What is the sum of public charging, private charging and charging at the workplace in Europe and worldwide? This data has not yet been available. But they are decisive for us.

What came out

In Europe, the number of electric cars is currently growing five times as fast as the infrastructure. Given this imbalance, it would be a mistake to ban the modern and constantly improving internal combustion engines. That would inevitably lead the largest industry in Germany into a contraction scenario. I warn against that. Rather, we advocate combining the CO2 targets with binding targets for the charging infrastructure.

When will it get tight: 2025?

We are investing in the infrastructure ourselves and are even bringing additional investors on board. The public mostly looks at long cross-country journeys, i.e. the highways. We are on the right track with our Ionity joint venture. However, public charging only accounts for around 20 percent of people's charging behavior. Private charging at home has by far the largest share. And there are still significant hurdles. Not only with the charging boxes, but also with the medium and low-voltage networks, i.e. the 'last mile'. Charging infrastructure is expensive for investors. It takes time for the business model to be profitable.

That could mean: the road to electromobility is still long?

We are advancing electromobility at a fast pace. For example, we could build 100 percent electric cars in our Munich plant from 2026 if the market demands it. But we can still cover other drives. I assume that the market demand in 2026 will be so high that the plant will mainly build electric cars. Provided that the charging infrastructure moves along.

BMW boss Zipse: a clear commitment to the Munich parent plant
Its main plant is the only automobile plant in the world in the middle of a metropolis.

And thus a future model. Ten years ago one would have thought differently about it: Industry on the greenfield for maximum efficiency. But a modern city caters to all groups of society. In this respect, industrial work also belongs in the big city - also to shorten distances. We have people who walk to work in the factory. This is a model for the future, also to avoid gentrification and to keep all sections of the population in the city. A city that is only based on service is not a modern city.

There used to be conflicts with the surrounding residential development, for example because of the paint shop. And today?

The criticism at the time was justified. Ten years ago there was an old press here. When she made her strokes, the BMW skyscraper shook. Today there is a much larger press, but you can no longer feel anything. Because the foundation is now decoupled. The new paint shop emits almost nothing, and odor pollution is no longer an issue.

You need different employees today than you did 50 years ago.

Artificial intelligence is part of everyday life in production today. You need new qualifications. Classic industrial work is combined with software skills, and the division into commercial and non-commercial work is increasingly disappearing. We invest up to 370 million euros annually in training and further education. For example, for people who are completing a commercial training and studying at the same time. And every year we continue to employ 1200 apprentices in Germany. What they learn changes significantly. Academic training and the commercial profession are growing closer together. This is the only way to create production structures that can be highly flexible.

You mentioned artificial intelligence. Will you need less human work in the future?

We won't need that much less. Heavy physical work is already largely automated. Humans will stay - less because of their physical labor, but because of their high flexibility and their unique ability to cognitive perception. The human brain is so good at reacting, at the speed with which it can assess a situation. No computer can recognize a person's intentions to act as well as another person.

In the industry there is discussion about downsizing, at Volkswagen there are numbers of over 30,000 employees. How is employment developing at BMW?

Two years ago we started restructuring our staff and, ultimately, cut jobs to a significant extent through natural fluctuation and voluntary agreements. At the same time, there were over 10,000 new hires and takeovers from training and our own junior programs, with which we have further developed the skills of the workforce. Now we're at a point where it's all about building again. We are well on the way through the transformation, have prepared our plants for e-mobility and expect further growth in sales in 2022. That is why we will increase our number of employees by up to five percent next year. This is also an expression of our confidence that BMW is properly positioned for the future. With a current workforce of around 120,000 people, this corresponds to up to 6.

What qualifications do you expect?

In addition to a large part directly in global production, this is heavily influenced by IT. It's not just programmers, though. It's about using programs, for example on artificial intelligence. We are also hiring a lot of new developers in Munich, for example experts in battery cell chemistry. The competition for these talents is great. But we are at the forefront. What should not be underestimated: Software engineers are also enthusiastic when their applications come into their own in an emotional product like the iX or the new 7 Series.

That means, whoever wants to come in with you has to make an effort.

It has always been like this. BMW is a demanding employer with correspondingly good consideration. It's not just money. These are also opportunities for further development for young talents. And we have very interesting and tailor-made models for different needs.

What role does home office play for you?

This reduction to home office does not go far enough. It's about mobile, flexible forms of work that are suitable for different life situations. We now have hybrid work in almost every activity. But the belief that you could make the home office the center of all work does not apply to many functions at BMW. Here is a plant in which thousands of employees have to be present. It is important that the top management is visible and approachable. We have a lot of activities that rely on presence, a designer who builds a model, a development team. One should not underestimate the many chance encounters that lead to ideas and innovation. They are missing in the home office.

Does work always involve collaboration for you?

Absolutely. I believe in the creative power of people who work together. Work has to be enjoyable, but that is not a contradiction in terms of high performance. Work has to be fulfilling. The most recent employee survey showed us: people want to take on meaningful work, want to advance the company and mobility as a whole. It's not just about the money.

And what was the opinion of the employees about the board of directors?

We got a good testimonial. Even better than we hoped and expected. But that's not something we can rest on.
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      12-30-2021, 12:21 PM   #2
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Sounds like a well-educated, experienced manager. But I'm not getting a lot of vibes about protecting core BMW tenets.
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      12-30-2021, 01:31 PM   #3
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Quote:
Originally Posted by NightWriter View Post
Sounds like a well-educated, experienced manager. But I'm not getting a lot of vibes about protecting core BMW tenets.
I think BMW will as long as customers show up and demand it. At some point, they will make everything that people want to run on e-fuels which are zero emissions, aka what Porsche is doing, or find some happy medium as an all-out ban isn't likely as underdevelopment countries and or major manufacturing isn't entirely on board either.

Read the article below...

https://www.cleanenergywire.org/news...p26-car-pledge
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      12-30-2021, 02:15 PM   #4
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Great interview and insight into the current and future pace of the ICE and electromobility markets.

It's great to see such well-rounded questions that include the employee base.
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      12-30-2021, 02:22 PM   #5
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Probably would have been out of place, but I would have asked why BMW abandoned the design language that made them so famous through the 80's and 90's and if there would be any chance to rekindle in the future? (aka a polite way to ask about ugly front ends)
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      12-30-2021, 06:06 PM   #6
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Quote:
Originally Posted by tna3 View Post
Probably would have been out of place, but I would have asked why BMW abandoned the design language that made them so famous through the 80's and 90's and if there would be any chance to rekindle in the future? (aka a polite way to ask about ugly front ends)
Lol, I can answer that for you.

"We believe our design language must move forward with the times and our new models represent this new exciting direction focused on the driver but also on the emotion of driving, how dynamic it has become (marketing BS talk). For example our new M-cars are 4 wheel drive today, something in the 80s and 90s would be unthinkable (some deflecting). Moreover, our customers today in the very crucial markets in USA and China want that the cars look more aggressive, and reflect the performance they bring (right!)... As I mentioned, the I4 and IX which sport very bold new language in design are sold out and in very high demand. The recently shown XM SUV has received a great deal of coverage also (technically correct). We think our customers are very important to us and they really appreciate our cars and what the brand stands for".

Something like that he will say.

I know you want him to admit that "yeah, we have this woke marketing team that took over and the designer is on a contract we think is too tricky to end, so just like you im biting my fingernails in horror but let's hope that at least the way cars drive will keep some of the purists happy, fingers crossed. Sorry for calling you boomers, that was unfortunate, that person works in mail room now". But this will never happen.
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      12-30-2021, 08:17 PM   #7
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Quote:
Originally Posted by Tallest View Post
Quote:
Originally Posted by tna3 View Post
Probably would have been out of place, but I would have asked why BMW abandoned the design language that made them so famous through the 80's and 90's and if there would be any chance to rekindle in the future? (aka a polite way to ask about ugly front ends)
Lol, I can answer that for you.

"We believe our design language must move forward with the times and our new models represent this new exciting direction focused on the driver but also on the emotion of driving, how dynamic it has become (marketing BS talk). For example our new M-cars are 4 wheel drive today, something in the 80s and 90s would be unthinkable (some deflecting). Moreover, our customers today in the very crucial markets in USA and China want that the cars look more aggressive, and reflect the performance they bring (right!)... As I mentioned, the I4 and IX which sport very bold new language in design are sold out and in very high demand. The recently shown XM SUV has received a great deal of coverage also (technically correct). We think our customers are very important to us and they really appreciate our cars and what the brand stands for".

Something like that he will say.

I know you want him to admit that "yeah, we have this woke marketing team that took over and the designer is on a contract we think is too tricky to end, so just like you im biting my fingernails in horror but let's hope that at least the way cars drive will keep some of the purists happy, fingers crossed. Sorry for calling you boomers, that was unfortunate, that person works in mail room now". But this will never happen.
😂
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      12-31-2021, 10:33 AM   #8
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Great interview!

It’s obvious management is very careful to not fall behind in the development. They made very radical changes just a few years ago, and had those changes been made a year or two later it would have been a disaster. Now the pipeline is very attractive.

I know many traditionalists is a little annoyed at the extreme changes made. But at the same time, the industry is exposed to tremendous changes. Comparing 2018 to 2025 will be night and day. What happens between like 2000 and 2007? Not much. My point is just — after putting itself at the forefront of the development and standing out during a time people are looking for something completely new — there will be lots of time to look back and revert more to the core designs. JMHO.
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      12-31-2021, 11:54 AM   #9
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Quote:
Originally Posted by tna3 View Post
Probably would have been out of place, but I would have asked why BMW abandoned the design language that made them so famous through the 80's and 90's and if there would be any chance to rekindle in the future? (aka a polite way to ask about ugly front ends)
Why would it be "out of place" to ask the question. I guess the answer is that this is not a real press interview but instead is a piece of BMW advertising.
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      12-31-2021, 03:34 PM   #10
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Quote:
Originally Posted by Tallest View Post
Lol, I can answer that for you.

"We believe our design language must move forward with the times and our new models represent this new exciting direction focused on the driver but also on the emotion of driving, how dynamic it has become (marketing BS talk). For example our new M-cars are 4 wheel drive today, something in the 80s and 90s would be unthinkable (some deflecting). Moreover, our customers today in the very crucial markets in USA and China want that the cars look more aggressive, and reflect the performance they bring (right!)... As I mentioned, the I4 and IX which sport very bold new language in design are sold out and in very high demand. The recently shown XM SUV has received a great deal of coverage also (technically correct). We think our customers are very important to us and they really appreciate our cars and what the brand stands for".
...
And he would be right.
6 years ago I would NOT have gotten a BMW. Great driving machines but obsolete interior & exterior, engine & transmision troubles, lots of poor electronic components, bad software.

Today, things are looking a lot better.
I am getting my first BMW. An M4 Competion with xDrive. I like the aggresive look and the xDrive than can be switched off is great for somebody who doesn't want to keep more than one car. I have enough motorcycles
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      12-31-2021, 05:55 PM   #11
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Quote:
Originally Posted by tna3 View Post
Probably would have been out of place, but I would have asked why BMW abandoned the design language that made them so famous through the 80's and 90's and if there would be any chance to rekindle in the future? (aka a polite way to ask about ugly front ends)
A company that completely abandoned the characteristic driving dynamics that made them so famous is capable of abandoning everything else.
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      12-31-2021, 06:12 PM   #12
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Similar to prior interviews, he shows no passion for what this brand used to represent. His answers are weak and generic, no substance.
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      01-01-2022, 04:50 AM   #13
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Quote:
Originally Posted by tna3 View Post
Probably would have been out of place, but I would have asked why BMW abandoned the design language that made them so famous through the 80's and 90's and if there would be any chance to rekindle in the future? (aka a polite way to ask about ugly front ends)
He will come up with some mambo jumbo speech that will use some irrelevant pompous words that will actually avoid your question.

Even if you ask directly and showed them that a majority actually hates the car, they will not admit it.
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      01-01-2022, 05:16 AM   #14
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Originally Posted by Zircon View Post
And he would be right.
6 years ago I would NOT have gotten a BMW. Great driving machines but obsolete interior & exterior, engine & transmision troubles, lots of poor electronic components, bad software.

Today, things are looking a lot better.
I am getting my first BMW. An M4 Competion with xDrive. I like the aggresive look and the xDrive than can be switched off is great for somebody who doesn't want to keep more than one car. I have enough motorcycles
Obviously, you never had a previous BMW and you talk from your friends or other people perspective. You also lack any knowledge of BMWs history. BMW was always the benchmark of the pack in terms of handling and driving dynamics.
(Start reading).

In terms of electronics and components software can you please be more sepcific instead of throwing generic, unfounded phrases?
I mean what the heck are you talking about?
Since you never owned a BMW before from what perspective are you talking? From the perspective of your friends that brought all the abused second hand vehicles from Germany to Romania?
Even so, BMW electric systems where super stable compared with its competitors and they rarely posed problems. I don’t want to point out to manufacturers which are known to have “Christmas dash lights”.

Software-wise, BMW RULES (!) over the others! Why don’t you try other manufacturers GUI to see how much fun is to place a call, find a contact or access certain features?
This is another proof that you have no clue of what are you talking.

Engine problems are in all vehicles and very specific to many and all manufacturers.
Except BMW, - or Germans in general- throw their new product on the market, while other brands are waiting on the side to see what is all about. Every product was refined during its history and became better but very few can take pride in auto innovations as the Germans do.
You don’t like it? Buy a Toyota. It is reliable to take you form A to B in a very basic boring fashion.

In terms of transmission problems, you are OBVIOUSLY a guy that lacks any knowledge in the field.
First, the problems were almost inexistent in transmissions
Secondly, beside the specific soft tuning made by BMW to obtain the best performance in relationship with BMWs engines specs, they use the same extremely reliable ZF transmissions like other German manufacturers.

Get some proper education in the field and stop posting irrelevant non-personal knowledge in here.
I get that you have no personal experience with the brand, but I can not accept your generic “others-influenced” unjustified posts.

The interior was actually quite the opposite in terms of design as BMW always had (especially in the past) a beautiful and flowing design in the interior with a cockpit like design, made for the driver.
They not only had a very comfortable and sporty approach, but they use a wide palette of colours and refined materials. BMW was the inventor and the definition of “sport luxury sedan” term.

BMW never wanted to be the wild fashion guy, but rather the well dressed gentleman that will cary with elegance its impecable teutonic look.

Last edited by Teutonic; 01-01-2022 at 05:28 AM..
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      01-01-2022, 06:25 AM   #15
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Quote:
Originally Posted by Teutonic View Post
Obviously, you never had a previous BMW and you talk from your friends or other people perspective. You also lack any knowledge of BMWs history. BMW was always the benchmark of the pack in terms of handling and driving dynamics.
(Start reading).

In terms of electronics and components software can you please be more sepcific instead of throwing generic, unfounded phrases?
I mean what the heck are you talking about?
Since you never owned a BMW before from what perspective are you talking? From the perspective of your friends that brought all the abused second hand vehicles from Germany to Romania?
Even so, BMW electric systems where super stable compared with its competitors and they rarely posed problems. I don’t want to point out to manufacturers which are known to have “Christmas dash lights”.

Software-wise, BMW RULES (!) over the others! Why don’t you try other manufacturers GUI to see how much fun is to place a call, find a contact or access certain features?
This is another proof that you have no clue of what are you talking.

Engine problems are in all vehicles and very specific to many and all manufacturers.
Except BMW, - or Germans in general- throw their new product on the market, while other brands are waiting on the side to see what is all about. Every product was refined during its history and became better but very few can take pride in auto innovations as the Germans do.
You don’t like it? Buy a Toyota. It is reliable to take you form A to B in a very basic boring fashion.

In terms of transmission problems, you are OBVIOUSLY a guy that lacks any knowledge in the field.
First, the problems were almost inexistent in transmissions
Secondly, beside the specific soft tuning made by BMW to obtain the best performance in relationship with BMWs engines specs, they use the same extremely reliable ZF transmissions like other German manufacturers.

Get some proper education in the field and stop posting irrelevant non-personal knowledge in here.
I get that you have no personal experience with the brand, but I can not accept your generic “others-influenced” unjustified posts.

The interior was actually quite the opposite in terms of design as BMW always had (especially in the past) a beautiful and flowing design in the interior with a cockpit like design, made for the driver.
They not only had a very comfortable and sporty approach, but they use a wide palette of colours and refined materials. BMW was the inventor and the definition of “sport luxury sedan” term.

BMW never wanted to be the wild fashion guy, but rather the well dressed gentleman that will cary with elegance its impecable teutonic look.
You have your opinion and I have mine. Mine improved lately.
The only thing I want to add is that I don't discuss beaten, "tuned" or shady cars imported from Germany.

Btw, you also mention a huge problem for BMW as a brand. They want to be the fashion guy but sadly, a few years after release those cars dribble down to very unsavory people. Of course, it happens to Audi and Mercedes but some BMW owners really stand out.
Appreciate 0
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