BMW achieves 4 billion euro savings goal ahead of plan

Automotive News reports that BMW has reached its goal of reducing spending on components by 4 billion euros (USD5.5 billion) ahead of its 2012 deadline. This information was relayed by BMW purchasing boss Herbert Diess: “We have completed our materials cost-reduction program more than one year earlier than expected. We have saved more than 4 billion euros since 2007 and therefore we have reached our goal to be at a competitive cost level with our material costs. Now we want to concentrate on innovation and quality.”

This is good news for BMW’s suppliers who complain that BMW was putting too much pressure on cost-cutting. Diess added that their strategy is not differentiating their product from the competition by the cheapest part, but by the best and most innovative. BMW focuses on quality Already today we employ more quality engineers than purchasers. Even  through cost cutting on parts, BMW’s warranty costs significantly decreased in 2010.

With the goal of selling more than 2 million cars by 2020, Deiss expects their purchasing volume to grow further from 28 billion euros in 2010.