Formula One Racing is Out, Green is In at BMW

Last Updated Sep 16, 2009 9:00 AM EDT

BMW made two separate announcements that together symbolize BMW's changing priorities going forward, releasing a 116-page report on its environmental activities, while at the same time selling off its Formula One racing team.

Racing may be window-dressing for a lot of brands, but it's a core value for BMW, which after all has been touted for a couple of generations now as the "Ultimate Driving Machine."

At the same time, environmental sensitivity isn't the first thing that comes to mind when you think about high-performance BMWs.

BMW is trying to change that, by playing up fuel efficiency and low emissions. Over the years, the company has already poured a lot of resources into making its engines fuel efficient, considering their power and size, but BMW's brand image hasn't kept pace.

Real progress has been substantial. BMW says in its latest "Sustainability Report," published Sept. 15, that it cut CO2 emissions by about 27 percent in Europe from 1995 to 2008. BMW is also working on alternate-fuel concepts, including a growing number of hybrid models, and a 600-car fleet of Mini electric vehicles being tested in Europe and the United States.

Meanwhile, BMW announced at the end of July it would drop its Formula One team. "Our decision to end our Formula One campaign was anything but easy," said Klaus Draeger, board member in charge of development. "In times of economic and societal change, we must remain capable of taking action and being flexible. We have now paid tribute to this fact," he said at the time.

BMW said on Sept. 15 that the new team owner is Qadbak Investments Ltd, a Swiss-based foundation representing investors in Europe and the Middle East.

BMW is taking a cradle-to-grave approach to "sustainability," including its factories and the supply chain, and taking into account long-term environmental impact and recyclability of components.

To be sure, BMW and all other automakers are facing tougher environmental regulations, so some of what they're doing would be required by law anyway. But BMW pointed out that it is tackling the environmental problem pro-actively, despite the fact that its sales, profits and employment are all down.