X4 joins BMW SUV onslaught

BMW Australia has filled yet another niche in an expanding SUV line-up that could soon account for half of its overall sales.

The all-new X4 arrives in showrooms this week, filling the gap between the X3 upon which it's based and the nation's most popular luxury SUV, the X5.

BMW already sells more SUVs in Australia than any other premium car-maker, with 4820 sold in the first half of this year – marginally more than Land Rover (4752), Audi (2990) and Mercedes-Benz (1965).

So far this year SUVs account for about 38 per cent of BMW's local sales – up from 34 per cent in 2010 but down from a high of 42 per cent last year, due to short supplies of the X3 and X5 supply, a delayed release of the entry-level X5 x25d variant and more competition from compact SUVs like the Range Rover Evoque, Audi Q3 and Mercedes-Benz GLA.

Nevertheless, BMW sells a higher proportion of X models in Australia than it does in most other markets, and globally, where it has found homes for 3.2 million SUVs since 1999 when the first X5 arrived, accounting for about 30 per cent of total sales.

Apart from Land Rover, only Porsche beats BMW's SUV focus with the Cayenne and now Macan, but the Bavarian brand forecasts SUVs to account for 50 per cent of its Australian sales within about three years.

Of course, Audi has effectively announced plans to fill every SUV niche between Q1 and Q8, and Mercedes will soon add GLK, MLC and GLC models to its crossover line-up.

In the meantime, Lexus will release its NX compact SUV, Land Rover will deliver a new family of Discovery models and Jaguar will follow with its first SUV, based on the C-X17 concept.

But BMW hasn't finished yet either, with plans to eventually offer an SUV range including X1, X2, X3, X4, X5, X6 and X7 models, plus MINI.

In addition to the all-new X4, BMW Group Australia will next month release a midlife makeover for the X3, and a new X6 later this year, along with facelifted Paceman and Countryman crossovers from MINI.

The all-new seven-seat X7, which has been confirmed for release in Australia by 2017, will bring to seven the number of BMW SUVs.

BMW will spend $US1 billion to increase by 50 per cent the capacity of its Spartanburg plant in the US, where all models but the X1 are built, from 300,000 to 450,000 within two years.

BMW Group Australia’s general manager of marketing Toni Andreevski said the X7 is "certainly a car that would work in our market.

"We’re very much looking forward to having a car like that in Australia, particularly given the growth in the sports activity vehicle segment, as well as the fact that some of our competitors have done quite well in that upper echelon.”

While the next X1 is expected to be based on the same UKL platform that underpins the new MINI and BMW's first front-wheel drive model, the upcoming 2 Series Active Tourer, the compact modular architecture is also tipped to spawn the X2 crossover to slot between X1 and X3.

BMW says the arrival of its fifth SUV, the X4, follows the success of the larger and conceptually similar X5-based X6, which has also inspired Mercedes-Benz to develop a large 'coupe-SUV', this time based on the M-Class, previewed by the Concept Coupe SUV and expected to be badged as the MLC.

Globally, BMW has sold 250,000 examples of the original E71 X6 since 2008 – well above its own forecasts. In the same period, it sold 750,000 X5s, meaning one in three buyers of large BMW SUV buyers opted for the coupe-style X6, which has been far less popular in Australia, with less than 2500 sold.

“A lot of people said the X6 was an answer to the question that nobody asked but in fact it was an answer to the question 250,000 people asked before they even asked it,” said Andreevski.

Priced from $69,430 plus on-road costs, the X4 is available with the same four- and six-cylinder petrol and diesel engines as the X3 it's based on, and costs about $9000 more than the equivalent model – but comes with a similar value of extra equipment.

Pricing tops out at $87,430 plus ORCs for the X4 xDrive 35i – just below the X5.

X4 sales are forecast to be about 20 per cent of the X3's, meaning around 600 annual sales, including a large proportion of newcomers to the brand.

Combined with the X3, the F25-series X4 should see BMW overtake Land Rover and Audi in the mid-size luxury SUV segment.

However, BMW admits there will be sales substitution of other models, with up to half of all X4 sales coming from other BMW models.

"Depending on their stage of life, some people may downsize from X5 and others may migrate from X3 or even 3 Series, but they're more likely to come from smaller vehicles" said Andreevski.

"But there'll also be coupe and SUV customers from other brands, with a higher skew towards men and a more affluent target audience like the X6."