BMW and Jaguar Land Rover Collaborate on Electric Vehicles
These days, alliances are becoming increasing common in the auto industry. The collaborations are viewed as a solution to boost research programs and reduce costs associated with building new technology, including electric powertrains and driverless platforms.
Leveraging such strategy are two well-established car brands that recently formed a collaboration: BMW and Jaguar Land Rover. The team, which confirmed the partnership earlier this month, will combine their experience and expertise to develop EVs. At the moment, the two groups are in the process of fulfilling a separate deal surrounding the supply of 8-cylinder engines (according to Reuters).
The BMW-Jaguar collaboration entails building next-generation EV components. Based on the agreement, both parties will contribute to the research and development of electrified auto parts. The resulting components would then be manufactured at separate production plants owned by BMW and Jaguar. For the latter automaker, it could utilize the Wolverhampton-based Engine Manufacturing Center (EMC) – a facility dedicated to producing engines. The building was opened in 2014 and currently contains more than 21,000 solar PV panels.
"Together, we have the opportunity to cater more effectively for customer needs by shortening development time and bringing vehicles and state-of-the-art technologies more rapidly to market," said Klaus Froehlich, Board Member at BMW.
Prior to committing to the partnership with Jaguar, BMW held meetings with Daimler about collaborating on EV platforms. According to reports about the potential deal, the automakers were looking to pad development costs for EVs. The companies also proposed sharing the development of a compact EV on a common, robust platform.
So far, buddying up with other businesses has been effective in staying relevant, as auto trends shift to electrified transportation and autonomous solutions. Alliances, such as the Mazda-Toyota ongoing joint venture (formed in January 2018) and the Volkswagen-Ford partnership on commercial vehicles (formed in June 2018), are also viewed as a way to ease risks when dabbling into new automotive technology.
Taking on Challenges in EV Manufacturing
Both BMW and Jaguar are in a position to benefit from the partnership. Shared research and development programs will likely lead to cost savings, as well as increased operating efficiency. Furthermore, as regulators tighten emission standards and promote sustainable transportation, both carmakers would be able to actively meet such guidelines while maintaining healthy profits. In this aspect of the collaboration, the groups will explore cost-effective methods in production planning and joint purchasing.
"Carmakers are much less precious about sharing electric car technology because it is much harder to create product differentiation with electric car tech. They all accelerate fast, and everybody can do quality and ride and handling," explained Carl-Peter Forster, a former Chief Executive of Tata Motors and a former Executive at BMW.
For Jaguar, a company owned by India-based Tata Motors, the new collaboration supports its efforts in reviving its business after reporting a staggering $3.6 billion loss in the last fiscal year. The car manufacturer cited weak demand for sports utility vehicles and increased competition as factors that contributed to its lackluster performance.
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