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Borgward returns to Germany, the best is yet to come

When the last of the Borgward Isabella came off the production line in Bremen, Germany, the grim-faced workers engraved it with a sign reading “Du warst zu gut für dieseWelt,” (You were too good for this world). For a brief moment in the mid-1950s, Borgward was the second largest car company in Germany. Now the legend is back, having been resurrected by the grandson of Carl Borgward, the original company founder. In 2008, Foton Motor bought the rights of the brand from Christian Borgward, Carl’s grandson. Karlheinz Knöss, the new president of Borgward, relaunched of the once prominent German company at the Geneva Motor Show in March 2015, more than half a century after Borgward ceased productions following its bankruptcy in 1961. And now the automaker will be returning to Germany and build a production facility in Bremen.

 

Return of a legend

Bremen was the former home of Borgward, which produced around 1.2 million Borgward, Goliath, and Lloyd brand vehicles there from the 1920s until the date the last Isabella rolled off the production line. “Through our return to Bremen we are linking the past with the future,” said Ulrich Walker, CEO of Borgward Group AG, in Bremen on October 26. “We are continuing to write the history of Borgward.” Construction of the new manufacturing facility is scheduled to begin in early 2017 and production will be launched at the plant a year later.

“By taking this step, we are demonstrating our commitment to Germany as an industrial location and to our own heritage. Naturally, our return here is also of symbolic significance, as today marks the beginning of a successful cooperation between the city, the state, and Borgward,” Walker added.

“Production will be designed from the ground up to be flexible and organized in such a way that we can adjust – and thus increase – production output and the number of models to the demand at any time as we enter other European markets.”

Between 50 and 100 jobs will be created in Bremen during the initial phase and workforce numbers and investment will be added as production output increases.

In the first phase, the company will build an SKD manufacturing facility with a production capacity of up to 10,000 vehicles per year in an assembly hall of around 10,000 square meters of floor space. Borgward’s Bremen plant’s manufacturing system, processes and equipment will follow the Industry 4.0 standard. The facility’s layout will be focused on the smart factory, which is extremely efficient and able to handle the increasing complexity in automotive manufacturing.

It has announced its major suppliers including Continental, Kuka, Schäffler/SKF, Bosch, LG, BorgWarner and Webasto. For production of all-electric vehicles, Bosch will be the key supplier and batteries will be provided by LG. The German plant will first roll out the BX7 EV, followed by electric and plug-in hybrid variants of the BX6 and BX5 SUVs.

Borgward’s plant in China is based in Miyun, northeast of Beijing and was commissioned in mid- 2016. It was also constructed according to the latest Western standards. The Chinese plant will collect and evaluate all the feedback and experiences from the various markets and production locations, develop solutions, and feedback this information as lesson learned to the Bremen plant.

 

The revival of the brand

Borgward was founded in 1919 and bolstered in particular by the German economic miracle, the enterprise developed into a global corporation overseeing a broad product offering that was split across three brands – Borgward (mid-range and luxury cars and trucks), Lloyd (small cars) and Goliath (lower mid-range cars and light delivery trucks).

The company had manufacturing facilities in Bremen, north Germany. A Borgward catalogue of 1959 listed more than 2,200 authorized dealers and workshops worldwide, covering every continent. From 1955 onwards the export ratio of the Isabella was further fuelled by strong demand from the U.S. In fact, after Germany the U.S. became the second largest market for this most beautiful of Borgwad models. Once regarded as a rival to such revered brands as Mercedes-Benz, the company’s more successful models included the Hansa 1500 of 1949, the Isabella launched in 1955 and the P100 introduced in 1959. The Isabella is considered by some to be one of the most beautiful cars of its era; the Borgward 2400 was an early fastback sedan, available with an in-house automatic transmission; its successor, the P100, was one of the fastest cars in its segment and fitted with an air suspension, including an innovative anti-roll and anti-dive system.

In the record-breaking year 1959, when the Group built more than 100,000 vehicles the export ratio across all of Borgward’s vehicle series reached 63.5 percent. Some 35.6 percent of all the cars exported by the Group were headed to the U.S. At the end of the 1950s, measured by the proportion of output exported, more Borgward Isabellas were sold abroad than any other German-built car.

Although the company produced a total of two million cars, it went bankrupt in 1961. Its Bremen production base was purchased by Mercedes-Benz.

Ten years ago, Christian Borgward teamed up with former Saab and Daimler PR executive Knöss and founded an initiative for the revival of the brand in China. Foton, Borgward’s partner in China, holds 100 percent of the Borgward Group’s stock. Though it has never produced passenger cars, it was a logical choice for Borgward. “It was important to partner with a company in one of the target markets like China,” Knöss said. “If we would have tried to get all the permissions to produce and to sell cars there it would have taken us another 10 years.”

Deep pockets of Foton have helped Borgward’s wheels rolling again in 2008. At the Frankfurt Motor Show the flagship BX7 was unveiled. And the BX5 and BX6 models were exhibited the year after in Geneva. And at the Geneva Motor Show in 2016, Foton also announced its future business plans for re-establishing the Borgward brand – deliver up to 800,000 cars per year by 2020 in the initial phase. In the second phase of operations, Borgward proposes to produce up to 1.6 million cars annually by 2025. China is the starting point of the brand’s revival and the company is preparing to set up a branch in India and will gradually expand into other emerging markets including Russia, Brazil and the Middle East countries, and eventually back to German-European markets.

A sales goal of 800,000 cars per year by 2020 in the initial phase – a bold target indeed when the Borgward Group’s total sales over the years of its previous incarnation were just over two million. “We want to become one of the top players in the automotive industry,” said Knöss. “We will reach that, definitely, and in roughly two years’ time we will enter the German-European market. And we will continue to look for new partners and investors.”

According to German media, Daimler AG intends to invest in Borgward with the aim of complementing its mid-end brand product portfolio to compete with Volkswagen. Daimler AG and Volkswagen have been involved in fierce competition over recent years. The Volkswagen brand, a mid-end one, features huge product sales to ensure an advantage in R&D and production costs. However, Daimler lacks a proper brand to compete with the Volkswagen brand. Following an investment in Borgward, Daimler can tap into the low- and mid-end segments. Mercedes-Benz’s cooperation with Borgward may start with technology investment, just as the way it forms an alliance with Aston Martin. Additionally, Mercedes-Benz and Borgward enjoy a good foundation for collaboration as the two brands embrace similar German corporation culture.

 

Performance in Chinese market

The Borgward BX7 is a model targeted at the market for large mid-size SUVs, a segment that is highly popular around the world, the 4.70-meter newcomer boasts an innovative all-wheel drive system, powerful plug-in hybrid drive technology and the most advanced online communication and entertainment system. Outstanding safety is guaranteed by the intelligent and comprehensive PROTECT, an all-round intelligent occupant-safety concept which includes pioneering vehicle-dynamics and driver-assistance systems with a preventive function to help avoid collisions. In the worst case, passive restraint systems and a highly stable passenger compartment with precisely defined deformation zones provide reliable protection and can significantly mitigate the consequences of an accident for vehicle occupants. It stands out in a crowded field of competitors with a “wing line” design and the premium interior includes a large 12-inch dashboard touch screen. Price of the BX7 ranges from ¥169,800 ($24,680) to ¥302,800, which is very competitive in its segment as the rival Audi Q5 starts at ¥375,000 in China.

The BX7 has been a big hit ever since it was launched in its first market China in June. To date, around 14,000 units have been sold according to data provided by the company. Borgward has built a sales network of around 100 dealerships in China and expects that number to reach 120 by yearend.

In accordance with Borgward’s announcement that it will begin sales in Europe with electric SUV Borgward BX7, the first model to be produced in Bremen, and followed by electric and plug-in hybrid versions of the BX5 series and other models.

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