Electrifying Times: restructuring and decision-making in an automobile concern in the 21st century – The case of BMW Group

Abstract

The aim of this paper is to capture the changed location decision-making processes and location factors of the automotive industry, resulting from the current challenges brought by electro mobility. From the Taylorist assembly-line production system in the “Fordism” era to the just-in-time focused manufacturing of the Japanese carmakers during “post-Fordism” and at the turn of the millennium with global production and new technologies in the digital age, location analysis has changed massively over time. The same is to be expected for the fourth revolution in the industry. For this reason, the decision-making process of a major German car manufacturer is analysed in a field study conducted over a two-year period. Based on this, a decision process that takes the new framework conditions into account is modelled. The relevant location factors are then examined in a survey of the relevant departments in the BMW Group. Due to the changed production requirements in the course of the electrification, the uncertainty in the technological change and the unstable political trading conditions, the factors: network suitability, risk exposure, optimal sunk cost usage and sustainability play central roles. Before the latest economic crisis, the industry was focused on exploiting opportunities and expanding the production network. This tendency now seems to be transformed by a volatile technological future and by cost pressure. This means that ‘sustainability’ is increasingly important in automobile industry decision-making, but in specific ways.