Critical Report of Bmw Social Performance

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Unit Title: Communications in Business 100

Assessment: Critical Essay

Company: BMW AG

Essay Title:Social Responsibility of Recall

Student Name: Li Fuzhe

Student Number: 14726251

Student Email Address:

Semester: 1 2011

Campus: Bentley

Tutor’s Name: Bernal Juan

Tutorial Day and Time: Tuesday 10 a.m—12 a.m.


BMW AG, founded in 1916, is a premium automobile and manufacturing company. It was an aircraft factory before. In 1923, first BMW motorcycle was produced. Five years later, BMW acquired Essen that Hector car factory, and start the production of cars. Now days, BMW is famous for its performance and luxury vehicles.

To fulfill its social responsibility, BMW keep trying to design less-polluting cars to protect the environment. They developed high technologies like electric and hybrid power (Grahl, C, 2006). All these effort made BMW an environmentally friendly company (Bird, J and Walker, M, 2005).

The case against BMW

Although BMW is one of the best automobile companies of the world, it still has some problems that make it unsatisfactory (Pankaj Doval, 2011). For example, the overpriced of vehicles. It has very high price much more than others no matter vehicles and components. It always makes people in trouble. Why should we pay much more than other cars, even 2 or 3 times on the components? Many people think it’s quite unreasonable, because they will have to be inflicted on the high price. This phenomenon in China is much serious. Why BMW in China is so much more expensive than Canadian and Australian price? I have compared BMW website in China, Australia and Canada. All the BMW in China cost nearly twice as much as Canadian and Australian price after exchange the currency. According to the price list on the websites, if a BMW 1 series cost 46000 Canadian dollars in Canada it would cost 92000 Canadian dollars in China (Price and Promotion, 2011). For the business and stakeholders, high price meant high profit and high equity, but the result is no longer lasting. According to BMW’s financial report its profit has dropped year and year (Horatiu B, 2009). In other words, high price of components will make drivers face the dilemma when they have to repair their cars. In order to avoid the maintenance cost, some drivers would rather repair the car by themselves, or take their cars to a garage to have it repaired. This also increase the risk factor to themselves when they are driving.

Indubitability, BMW is the leader of now days auto industry. As an important vehicle corporation, its social contract is producing qualified cars rather than reducing the costs because quality means a promise of safety to the society (Tapiero 2010). However, it still has several problems of poor internal managements and quality. Most problems are about the braking and engine system. BMW has recalled many times these years, that reduced lots of trust of people’s. Here are some example of the recalls. 1. BMW of North America recall nearly 200000 luxury vehicles to fix leaks that could develop in the power braking system (AAP, 2010) 2. BMW recalled certain vehicles from the 2007 to 2010 model years to check and possibly replace their fuel pumps. (Jonathan, 2010) 3. BMW recalls some turbo-charged cars following ABC news investigation. (Chris et al, 2010)

The recall involves BMW 5 Series, 6 Series and 7 Series vehicles powered by v8 and v12 engines from the 2002-2010 model years and certain Tolls-Royce cars from the 2003-2010 model years.
They recalled 10522 vehicles in the UK and, reportedly, 200000 in North America(Russell, 2010)
From the list above we can see, although BMW sell their vehicles very expensive, it still did not reach the standard to fit its price.
In my opinion, the purpose that people buy car is to enjoy the comfortable, happiness and safety. They will not prepare to pay for the...
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