#1 not negotiable: BMW Oz boss

BMW Australia's new boss, Stavros Yallouridis, has drawn a line in the prestige market sand -- his brand will be number one Down Under again this year and he intends to keep it there.

Yallouridis declared that BMW had cemented the number one spot in the premium marketplace for 2009 at the informal 'launch' of the updated 6 Series coupe and convertible in Melbourne last night. He stated that BMW's lead in the upmarket passenger and SUV segments was unassailable in 2009 -- and furthermore, claimed it has been achieved without the wholesale demonstrator registrations and widespread discounting of his opposition.

Yallouridis dismissed news that the brand would up stumps from its longtime Mulgrave (Vic) headquarters as comments taken out of context. He stated consideration of a move was purely an indication that since his arrival at BMW Australia the company had undertaken a "serious top-to-bottom review" of its business. Any relocation would be a longer term decision, he told the Carsales Network.

According to Yallouridis, BMW will finish the year with sales north of 17,000 units. This would give the brand leadership in the premium segment, however -- by dint of its commercial vehicles division -- Mercedes-Benz will still sell more vehicles overall.

BMW sources stated Audi had already "locked in" its final 2009 sales number -- around 11,500 units.

Leadership at the end of 2009 will see BMW topping the prestige car rankings in Australia for the sixth year in a row. It's a position Yallouridis is not prepared to lose. He says claims from Audi that 15,000 sales per year will give it the number one spot in 2015 don't add up.

"I think that BMW is very close to [selling] 20,000 cars [per year in Australia] in the near future… If Audi's quoted 15 [thousand sales] we're already doing 17 [thousand] so why would I be talking about losing leadership when we're talking about going forward with 20,000 cars?" Yallouridis pondered.

Other brands have claimed premium brands will hit a 18,000 unit ceiling in Australia, but Yallouridis says BMW has room to move Down Under.

"If you have a look what's happening [in markets] around the world, BMW has a far better market share than what we have in Australia. There's a lot of work to do, but there's a lot of potential," he said.

Melbourne-born but European based since 1987, Yallouridis defends BMW's recent $4000 EfficientDynamics Credit as strategic... as opposed to blanket discounting.

"It wasn't a trick -- it was straightforward communication. We said we're giving $4000 worth of credit. The idea was to lead to a European style [scrappage discount] -- trade in your old car for an efficient car and we will subsidise it.

The repricing of the 323i from around $67,000 to the mid-$50s is a hint at the sort of strategies BMW Australia might also employ going forward. BMW says this specific adjustment was employed to address the significant reduction in cost of cars like the Mercedes-Benz C-Class, and also move buyers up into six-cylinder BMWs sooner.

The BMW boss also took a shot at the practice of pre-registering cars. It's rampant, according to Yallouridis. He says BMW will no longer play that game.

"We don't like to say discount. [But] Everyone is doing it some way or another… Our competitors are actually selling cars with no customers and [re]selling them as demonstrators the next month… The dealer advertises the next day after the end of the month ex-demonstrator, $20,000 discount and you go there and it's brand-new, zero kilometers… We're not doing that."

According to Yallouridis, BMW has changed its dealer bonus schemes to discourage this practice. As a result, he claims his company has effectively destocked dealers during 2009 with the net result that more BMWs are in hands of local owners (and not awaiting sale, registered on dealer forecourts) than the same time last year.

"If you look at our real numbers year to date, we've actually delivered 1000 cars more [than the same time last year] to real customers."

Official VFACTS statistics show BMW passenger car registrations are 6.6 per cent down on 2008 October year to date. This compares to a deficit of 2.8 per cent for Mercedes and 5.8 per cent growth for Audi. BMW has registered 9822 cars during the period compared to Benz's 10,122 and Audi's 7349. Lexus is languishing 31.6 per cent down with just 2469 registrations.

In the SUV segment, with 4117 registrations, BMW is down 4.9 per cent over the same period last year. Lexus (2190) is off 4.6 per cent, Benz (1799) is down 8.9 per cent and with 2263 units Audi has almost doubled its SUV registrations (thanks to Q5).

In the face of tough discounting and demonstrator-led volume, the 'EfficientDynamics Credit' keeps BMW in the game, Yallouridis contends.

"When I've got the car, which is an ex-demonstrator and they are giving $15,000 discount for a brand-new zero-kilometre [car] and I've got a dealer network that's got to survive, [then] I can't be out of the market… I've got to offer something to the customers. We're saying okay, we offer something and BMW stands for something.

"It's a controlled direction about how we approach our sales and it's working. I'm comfortable and confident there's a lot of interest because the BMW brand here has a certain amount of respect -- when we say something we mean it."

However, Yallouridis stopped short of declaring that an end was in sight for the blanket discounting prestige brands are contending with, both in Australia and other markets.

"It's a tricky one… I really don't know [if blanket discounting will stop]. You can go to a premium [consumer] brand, in terms of women's handbags, dresses, Prada, Louis Vuitton and you ask for a discount and you leave that shop saying: 'What an idiot I was for mentioning it…' They look at you and say get out of this shop -- we're premium. You [then] buy the product without [any] discount. But they don't have the competition [like the car brands] because its one-off, two-off and it's controlled," Yallouridis opined.

"That's why we say $4000 credit -- that's what we're offering. If you go to [deleted] and get $20,000 [discount] there will be people who are buying it at $20,000 discount and 25 [thousand] and 15 and 10 at other places," he said.

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