BMW has named its top production manager, Oliver Zipse, as CEO to lead the luxury automaker through a shift to new ways of doing business such as electric vehicles and offering cars on a per-use basis.
The company said Thursday that Zipse, 55, would succeed Harald Krueger on Aug. 16. Krueger, 53, had said on July 5 he wouldn't seek to renew his contract when it expires next May.
The BMW board of directors made the decision during a meeting at its plant in Spartanburg, South Carolina, where it turns out SUVs for U.S. customers and for export.
The company has been buffeted by the trade conflict between the U.S. and China and saw its weakest profitability in a decade in the first quarter. Krueger's four-year tenure has seen the company lose its global lead in luxury sales to rival Mercedes. The company gained an early edge in battery cars with its i3 city car in 2013, but was slow to follow up with more battery models, choosing to emphasize battery-internal combustion hybrids while California upstart Tesla seized market share in premium battery cars.
Zipse, a mechanical engineer who started at BMW as a trainee in 1991, must now steer the company through a shifting business environment in which software and services are playing an increasing role. Tesla has challenged automakers in the field of electric cars, while tech companies Waymo and Uber are working on autonomous vehicles. BMW has joined its services businesses in a joint venture with competitor Daimler AG, maker of Mercedes-Benz cars. Those businesses include its Free Now taxi-hailing and its Share Now car-sharing service.
BMW board chairman Norbert Reithofer, who was Krueger's predecessor as CEO, said that Zipse "will provide the BMW Group with fresh momentum in shaping the mobility of the future."
BMW lost 310 million euros on its automotive business in the first quarter after the company was hit by a 1.4 billion euro ($1.6 billion) charge for an anti-trust case and by higher upfront costs for new technology. Even without the anti-trust charge, its once-fat profit margins shrank. Only the financial services and motorcycle divisions pushed the company to a net profit of 588 million euros.
The company reports second quarter earnings on Aug. 1.