BMW: Driven by Design

The room is called, appropriately enough, the Penthouse. It takes up about 14,000 square meters atop the Forschungs- und Innovationszentrum, better known as the FIZ, BMW's sprawling, glass-and-steel R&D center in Munich, Germany. The Penthouse stands empty, save for a lone car cloaked in silver canvas. Parked on the west side of the room, the car is backed by floor-to-ceiling windows that reveal a great dome of sky filled with roiling thunderheads. Standing next to the car is a 45-year-old native of Wausau, Wisconsin named Chris Bangle.

Blond, blue-eyed, and bearded, Bangle is carefully assembled in a gray pin-striped suit, a blue-and-white-striped shirt, and a tie bearing a jazzy geometric pattern. He has a hardwired intensity about him, and his words take on an even greater urgency as he lifts a corner of the canvas and begins to assist in what can only be described as a striptease.

Bangle reveals first the wheels of the car, then its flanks, and on up to the hood, all the while acting as a kind of master of ceremonies in overdrive: "We call this 'flame design' . . . the splines hold the tension . . . these are surfaces that move; it's 'ooh, here we go' . . . proportion, surface, and detail all convey emotion, and yet they are all under control . . . control, control, control -- it's the most important thing." But then he stops. It turns out that this is a bit of a strip but more of a tease, for Bangle resists baring the entire car, BMW's 2003 Z4 sports convertible. There will be no full-frontal display of the Z4 before it makes its official debut at the Paris auto show in late September. At the push of a button, the Z4 takes a slow turn on a revolving platform. "This is it!" Bangle exclaims. "An absolutely hyper-modern roadster, full of mega-emotion."

Bangle is amped about the Z4 -- as well he should be. He oversaw the team that designed it. As BMW's chief of design, Bangle leads all 250 of the German carmaker's design engineers and artists, color experts, ergonomic specialists, materials scientists, clay modelers, and computer wizards, all of whom work in the FIZ and in the company's Designworks/USA subsidiary, located in southern California. Ultimately, he is the point man for the look and feel of every car and motorcycle that bears BMW's distinctive blue-and-white roundel, as well as the Mini brand and, as of next year, the ultra-luxury Rolls-Royce.

Every model launch at every car company represents a big bet, and the Z4 is no exception: It took a minimum of $1 billion to design and engineer the coupe and ready it for production. But there's far more at stake here than return on investment. The Z4 is BMW's radical follow-up to the January launch of its redesigned flagship, the 7 Series luxury sedan, which is arguably the most controversial model that the German carmaker has ever put before the public. Taken together, the Z4 and the 7 are at the forefront of a make-or-break attempt by BMW to reinvent its entire spectrum of cars. Such a gamble arrives at a perilous moment in Bayerische Motoren Werke AG's 86-year history: The company is coming off of a record-breaking year. And as anyone in the car business will tell you, nothing is tougher than surpassing past success.

Just consider this: While the U.S. auto market was down 1.3% in 2001, BMW posted a 10% sales gain in the United States and a 12% gain worldwide. In the United States, BMW roared past Mercedes-Benz to become the second-best-selling premium brand behind Lexus. And it beat all automakers in PricewaterhouseCoopers's annual survey on shareholder return.

At a time when many global companies are hunkering down and retrenching, BMW is moving forward, placing a big bet that it has a winning design for future growth. Companies typically take risks because there is no other option: Their backs are against the wall and there's no choice but to change. BMW is making bold moves at the very peak of its success. "Carmakers are running up against a very tough choice," observes brand analyst Will Rodgers, cofounder of SHR Perceptual Management. "Either they protect their market share and play not to lose, like GM and Toyota, or they go all out, place some big bets, and play to win. BMW is playing to win."

BMW's Design for the Future
It's just around midnight, and Bangle is lingering over a Weiss beer in a trendy Munich restaurant. He is thinking about Stephen Jay Gould, the renowned author and paleontologist who died this past May. Or rather, he is thinking about Gould's controversial theory known as punctuated equilibrium, which argues that evolution proceeds slowly, but not always steadily; it is sometimes interrupted by sudden, rapid change. Bangle believes that cars evolve in a similar fashion. And he is convinced that BMWs are entering a period of abrupt, accelerated change in their own evolution.