BMW AG Chief Executive Officer Harald Krueger told the board he won’t seek a second term, pre-empting mounting speculation over his future at the German luxury carmaker.
The 53-year-old executive, who has led BMW since 2015, has faced growing criticism amid falling profits and an electrification plan that was seen as too tentative for a rapidly changing industry, Bloomberg reported in May. Production head Oliver Zipse, 55, is the front-runner to succeed him, a person familiar with the matter said Friday.
While Krueger’s contract runs until the end of April next year, the supervisory board was poised to consider whether to grant him a second term, and it wasn’t clear whether he had the support.
Harald Krueger, chief executive officer of Bayerische Motoren Werke AG (BMW), looks on during a news conference in Berlin, Germany, on Friday, Feb. 22, 2019. Daimler AG and BMW are pouring more than 1 billion euros ($1.13 billion) into their joint car-sharing and ride-hailing businesses to take on the likes of Uber Technologies Inc. and Lyft Inc. Photographer: Krisztian Bocsi/Bloomberg
BMW has “complete respect and understanding” for the decision, Chairman Norbert Reithofer, and Krueger’s predecessor, said in a statement on Friday. The outgoing CEO “has demonstrated unwavering dedication to the BMW Group in all of the various positions he has held.”
Krueger was chosen in 2015 -- becoming the youngest CEO of a major carmaker -- to lead the manufacturer through a titanic shift to electric and self-driving cars. Yet a record rollout of new and revamped models has struggled amid tepid redesigns, while weaker global markets and trade tensions shrank profits.
BMW’s sales momentum also petered out under Krueger’s tenure, and after a decade-long run, the Munich-based company lost the global lead in luxury cars to Daimler AG’s Mercedes-Benz in 2016.
In May, Bloomberg reported that some supervisory board members were questioning whether Krueger was the right choice as CEO, following internal tension over his lack of aggression in introducing new electric vehicles.
The supervisory board will discuss his succession at a meeting on July 18, the carmaker said in the statement.
“I would like to pursue new professional endeavors and leverage my diverse international experience for new projects and ventures,” Krueger said.
Aside from Zipse, development head Klaus Froehlich, 59, was another potential candidate for the CEO job, Bloomberg reported in May.
BMW fell 0.5% to 66.78 euros as of 1:33 p.m. in Frankfurt. The shares are down almost 40% over Krueger’s term. By comparison, the Stoxx 600 autos and auto-parts index has declined by about 22% over the same period.
In one sign of the potential pressure, BMW’s stock drop forced a member of the billionaire family that controls the company to pledge more stock to back a separate business venture.
Susanne Klatten, who together with her brother Stefan Quandt own nearly half of BMW, pledged 1.12 million shares last month to cover a loan she used to finance an investment in a luxury high-rise building in Frankfurt.