BMW chose production head Harald Krueger to take over as chief executive officer next year as the world’s biggest maker of luxury cars opts for youth amid far-reaching changes in the car industry.
Krueger, 49, will become the youngest CEO of a major carmaker when he succeeds Norbert Reithofer after BMW’s annual meeting in May. Reithofer, 58, whose term was set to end in 2016, will become supervisory board chairman following the meeting, Munich-based BMW said today. “The automotive industry is undergoing a fundamental shift,” Chairman Joachim Milberg said in the statement. To continue as the No. 1 luxury-vehicle maker and help shape the future of the car, “we have to hand over responsibility to the next generation at an appropriate time.”
Krueger will be directing BMW’s response to challenges by Audi and Mercedes-Benz for the top spot in luxury-auto sales as well as broader industry changes such as self-driving cars. “I’m delighted BMW deals with this issue at an early stage,” said Arndt Ellinghorst, a London-based analyst at Evercore ISI. “This takes out speculation and creates clarity.”
Krueger was being groomed for the top job after being rotated through key parts of the company, including stints running personnel and overseeing the Mini and Rolls-Royce brands. His appointment as production chief was a clear sign that he was a top candidate to succeed Reithofer, who headed manufacturing before his appointment as CEO.
Reithofer, already the youngest CEO of a German car manufacturer, has led Bayerische Motoren Werke AG to record sales and earnings since taking the top post in 2006. He will succeed Milberg, 71, as head of the supervisory board, which in Germany has an oversight role above top management.
Mercedes narrowed BMW’s lead in the US in November, and Volkswagen, the world’s second-biggest carmaker, said that it’s hiring BMW’s development chief, Herbert Diess, to run the VW car brand. Diess will be replaced by Klaus Froehlich, 54, with immediate effect. Froehlich was previously in charge of small and mid-sized vehicles.
The industry is also dealing with a shift to Asia from Europe as the leading region for sales growth while confronting increasingly strict emissions rules. BMW has introduced the i3 electric auto and the i8 hybrid sports car in the past year, and Krueger outlined a project a week ago to develop hybrid versions of all BMW’s standard models.
As CEO, Krueger will be younger than industry counterparts such as Mary Barra, 52, at General Motors; Mark Fields, 53, at Ford; and Carlos Ghosn, 60, who runs French carmaker Renault and Japanese partner Nissan.
“We have taken the first steps for a generational change, which combines the need for continuity and experience with the creative energy of the younger generation,” said Stefan Quandt, deputy supervisory board chairman and a member of the billionaire family that controls about 47% of BMW’s voting stock. “This combination will be a decisive factor for the future success of the BMW group.”