Bullish BMW targets Benz

A bullish BMW has forecast it will ride on the back of burgeoning SUV sales to challenge Mercedes-Benz as Australia’s leading luxury brand.

BMW Australia boss Marc Werner forecast SUVs would account for around two-thirds of the brand’s local sales by around 2020-21.

“In the overall car market SUVs now account for more than 50 per cent of sales,” Werner told media at the annual ‘range day’ event. “That used to be 30 per cent in the year 2012 and the trend is definitely is going up.

“Our internal prognosis suggests we are probably going to see two out of every three cars sold being an SUV. That is what we are planning for, that is what we are ramping up for.

“At the end of the day we always want to be number one,” he added. “We have a very clear strategy set by the company; we want to be number one in terms of sales volume, we want to be number one in terms of customer satisfaction and that’s a very clear target for us.”

Werner forecast SUV sales, which already account for more than 50 per cent of BMW’s local sales, would be incremental rather chomp into passenger car share. He expected the SUV sales domination to spread across the premium segment.

“There is growth coming and we are prepared for it,” he said.

Werner’s strong statements come on the back of disastrous 2017 for BMW, when sales slumped by 15.7 per cent from 2016’s 28,028 to 23,619.

At the same time, arch-rival Mercedes-Benz lifted its sales from 35,946 to 37,068. The third leg in the German luxury trifecta, Audi, fell back 9.3 per cent to 22,011 sales in 2017.

“This is a very product life cycle driven market,” Werner said. “New car product launches really drive sales momentum for each and every brand but now it’s our time.

“We are going to strike back.”

Starting with the X3 medium SUV launched late in 2017, BMW intends to launch 25 vehicles in Australia over the next three years.

In SUV terms, the compact X2 is on-sale within weeks and then later in the year the X3-based X4 five-door coupe will be launched. Further SUV derivations will follow including the three-row X7, a full-on M version of the X3 and plug-in hybrids.

Among passenger cars, the i3s electric vehicle has just been launched and the fire-breathing M5 goes on-sale in March, followed by the i8 and Z4 roadsters and the 8 Series.

As all this expansion happens, the front-wheel drive 2 Series Active Tourer people-mover has quietly become an order only proposition.

“I am very confident with all the [future] products I have seen in the last two weeks when I was in Munich [at BMW global headquarters] that we are in an extremely good position,” said Werner.

Werner described 2017 as a year of consolidation for BMW, but expressed his confidence the trend will reverse in 2018.

“That was clearly a blip … 2017 has been a year of correction for us. We have had substantial growth for the last five years, grew the business by more than 50 per cent and we had to do some reset.

“The premium segment after five years of double digit growth declined by five per cent last year.

“We had some issues on the BMW financial service side and we also went through a massive network restructuring; ownership consolidation, new dealerships that were built, we divested our factory store in Melbourne, we relocated our Sydney dealership location.

“There was some disruption in our dealer network but we are preparing for growth.”

Werner said BMW and its dealers would be investing up to $400 million over the next three years developing the network.

“That’s unprecedented,” Werner said.