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11-06-2018, 11:31 AM | #1 |
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Would this help BMW's US sales?
Compared to the forums of 15-20 years ago, the language on this forum is quite negative and dismissive. When the E46 was new, there were several who moaned about the lack of feel compared to the 325i and M3, as there is every generation, but there’s a tang in the air compared to then. People complain about small idiosyncrasies of their cars; but then they gloatingly dump them and then hang around on the forum to recycle their decision daily. They despise the fact that BMW also builds cars they don’t like; they dislike the lack of dynamic competitiveness on the track; they focus on negative aspects of ride and handling (something that is supposed to be BMW’s forte) and as for the dealer network…!
So it got me thinking. Consider the typical North American buyer. He or she wants to buy a fast sedan or 2-door. They have choices of: Tesla – in top spec, faster in a straight line than any BMW and a good charging infrastructure in big cities. Who cares about the interior quality? It only has to last three years. Camaro and Mustang – hardcore, track-focused cars with weapons-grade chassis that are great around bends and – crucially – are also easy to live with. VW/RS3/STi for no-drama, point-and-squirt and cheaper hop-up parts. Various Japanese-American sedans with MT, for those who want the MT experience. For drag/auto-x/drifting, a number of better-suited Japanese-origin coupes. And of course a ton of good competition in SUVs. Historically BMW’s signature car is the 3 – with the 5 close behind. Both are plummeting in sales in America. BMW offers only two electric vehicles and both are rather odd (and very expensive); its hybrids are mild and not that useful, with short electric ranges. So here is a serious, genuine question: BMW tries to build cars for the world and does so successfully, but these aren’t compatible with the US and Canada, with its resurgent domestic auto industry. Needs and tastes are diverging fast. Is it time to carve out a US-only offshoot? |
11-06-2018, 12:32 PM | #2 |
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I think BMW, along with a number of companies, has realized that the US market is continuing towards more fuel efficient and hybrid crossovers and SUVs. Hence the expansion of the X line to include an X1 and X2, as well as the new X7. America has been trending towards SUVs since the late 90s, and that trend doesn't seem to be ending anytime soon. So I'm not surprised that the sales of cars are down, and the the X line is becoming the top seller in the US market.
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11-06-2018, 12:48 PM | #3 |
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I still see a lot of BMW cars although I am seeing more and more of the BMW SAVs.
In absolute terms, there is still a vibrant market for cars vs. SUVs; but it is a shrinking market. Mercedes, Audi, Alfa Romeo, etc. all still sell to that market in the US and Canada. |
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11-06-2018, 12:49 PM | #4 |
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Also lets not forget that esthetically bmw does not stand out among its competitors anymore.
Mercedes for example is making cars that are looking a lot better now days. Last edited by Wolf 335; 11-06-2018 at 02:57 PM.. |
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11-06-2018, 01:20 PM | #5 | |
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As for looks... some Mercs still have a bit of grace to them, but many are quite ordinary. I’d say “YMMV”, but I won’t, because no one else does . |
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11-06-2018, 01:33 PM | #6 | ||
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The Model Y is poised to do to BMW SUV sales what the Model 3 appears to have done to BMW sedan sales. The iX3 can help mitigate, but it's almost two years away, and the lack of a model with range over 300 miles and the (apparent, for now, but this could change) lack of AWD could be deal breakers against the Model Y. The thing is, BMW is already doing just what I describe in the first paragraph above. However, they got caught off guard by how attracted their particular target customer would be to an affordable electric sport sedan. They are playing catch up now, and it is very difficult to predict how things will further play out over the next decade. Unlike most other manufacturers, BMW's smaller size (relative to a GM, Toyota, or Daimler, I mean) and the nuanced overlap between a BMW customer and target Tesla customer has left them in a very vulnerable place. Creating a new brand specific to the US right now is the last thing they need. What they need is the right product - no one cares what the brand is, nor what you call it, it just needs to be able to distract people from Tesla - and they need it like yesterday. |
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11-06-2018, 01:50 PM | #7 |
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I think that mkoesel nailed it on the head. I would also add that there has been a demographic shift occurring over the last 20 years or so, causing more and more people to be less interested in a car that is "fun".
As such, for BMW to remain relevant in the marketplace, they have had to re-brand themselves from a true sports car enthusiast marquee, to more of a luxury car brand with some sporting characteristics. This has worked well for them and even though they have seen a decline in sales recently, the overall trend doesn't appear to be as dire. We all have to face facts that those who are genuinely interested in a fun and exciting driving experience are few and far between. The opinions of how many of us there are get skewed since you spend time here in the forums, where more like minded people exist.
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11-06-2018, 02:20 PM | #8 | |
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And, while most would agree that younger people tend to think along these lines, I suspect it is the number of folks in all age groups who now feel this way that would surprise us the most. It is perhaps similar to how it was not necessarily easy to predict that people of all ages the world over would become so entrenched in social media in such a relatively short time. It went from a kids toy to something that transcends age groups, everywhere. Automated vehicles and electric vehicles have the potential to see that same type of adoption pattern and dramatic growth. |
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11-06-2018, 03:32 PM | #9 | ||
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11-06-2018, 03:39 PM | #10 | ||
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11-06-2018, 07:07 PM | #11 | |||
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And that aside, a truly US specific premium vehicle - one not at all intended for other markets - is a tough sell to shareholders by any name. Surely a company with global sales success knows how to develop global products. Quote:
Now, there is also platform sharing and in some cases what is essentially rebadging of BMW models going on in China too. But that is a largely the biproduct of China’s requirements that foreign automakers partner with local automakers in order to sell vehicles there, not the result of a designed, free economy marketing plan. |
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11-07-2018, 02:53 AM | #12 | ||
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11-07-2018, 03:04 AM | #13 | |
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Whether this strategy is through a sub-brand (a la Lexus, which was designed for the US) or separate chassis/unibody specs (a la NMS Passat) I don't know. But what I do see is BMW about to fall off the charts, and something has to give. You raise some interesting other points though, thanks. |
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11-07-2018, 06:22 AM | #15 | |||
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There is the Countryman Cooper S E All4 which is a PHEV. It is true that there is no MINI EV until next year when the Hardtop 2 Door Electric goes on sale.
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That being said, excitement still matters. Can it be done with global product? Yes. Both Audi and Mercedes are selling small FWD/AWD sedans in the US with a relatively high degree of success. And again these are global vehicles built on global platforms. You will even see praise for these vehicles here on BimmerPost (you will naturally see some blind hate too, yes). So it’s true that, despite the shift in US (and to a lesser degree, global) consumer tastes toward SUVs, in the premium segments, sedan sales have remained strong, including enthusiast targeted variants. Where is BMW? They clearly dropped the ball in this regard (they will attempt to fix this next year, perhaps too little too late). They’ve also failed to develop any high performance powertrain and chassis for their small vehicle platform, which has left them woefully behind Audi and Mercedes for enthusiast mindshare. They’re now attempting to fix this too (M35i), but again too little too late with the 400hp RS3, TT RS, and the RS Q3 next up in a hot minute, making headlines. And Mercedes’ second generation AMG *45 lineup is incoming as well (mild hybrid, BTW) not to mention the *35 lineup. So, to the extent that these particular segments and consumers still matter (and clearly there is still some value) BMW doesn’t need US specific products, they just need to not be asleep at the wheel. Quote:
The big three may not have much success globally in the premium segments, no, but look at the local sales. Turns out they can’t compete on their home turf either. Why? Uncompetitive products are uncompetitive. And even when you build good ones (Cadillac is trying very hard) decades of neglect are tough to reverse. BMW on the other hand has as good a product as their counterparts. They’ve just botched the delivery. That, and, as mentioned prior, a significant portion of their target in the US is now moving to early adoption of the Next Big Thing. They have been zigging while the market zags. Quote:
And Tesla’s Asia/European sales? I suspect quality woes and confidence in the company play a big role in the lack of convincing performance so far. Time will tell if that can be overcome. But if not, it won’t be country specific product that beats them. It will be the right product - something that can actually match features - from a global automaker. |
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11-07-2018, 07:11 AM | #16 |
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BMW doesn't focus on "selling" new cars to customers in the US anymore since the majority of customers lease their products. BMW vies with Infinity for the title of the most leased brand in the USA at just over 60% overall. As MSRP goes up, the lease penetration does also, such that in some markets the more expensive models might have lease rates of 80+%.
IMO, this "lease customer" is a far, far different one than the traditional purchase customer of the old days. They are essentially like a boutique rental car business customer. They want the latest technology, styling, status (apparently huge emphasis on that one), etc, with no care at all for what traditional BMW buyers have sought after in the past. Track performance? No care. Steering feel? Only if it's light and no trouble to turn. Etc. They also have zero care for how the cars are designed for maintainability nor long term reliability. They especially have zero thought for repair costs out of warranty (lease) period. The latter being the reason something like an Alpina B7 7-series can depreciate over $100k in value in a relatively short period of time. If the majority of your customers are leasing with no care for many of these formerly important variables, what do you do? Ignore them? I think what they've done is cater to that lease customer and build cars to make it through a CPO warranty period so they can extract value from them at their dealers a second time after coming off that first lease. After that, who cares. As interest rates come off 5000+ (all known and guessed history) lows, a lot of business plans predicated on the past 10 years of central bank manipulations are falling apart. This of course is the point in time you depart your exec job with a pat on the back for a job well done in the recent past and a huge payout.
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11-07-2018, 08:14 AM | #17 | ||
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11-07-2018, 10:23 AM | #18 | |||
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That said, I think this same type of commentary has come up to at least some degree in reviews of the X1/X2. The 2 Series coupe/convertible use a platform derived from the 3 Series, so it is understandable that these comments are far less common there. Quote:
If BMW actually had a small sedan, then performances variants could create a halo for an entire UKL lineup. That effect seems to have been a factor with the Audi and Mercedes successes. Quote:
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11-07-2018, 10:36 AM | #19 | ||
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11-07-2018, 04:58 PM | #20 | |
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11-08-2018, 08:00 AM | #21 | |
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I don't agree that BMW fell asleep with performance versions of the hatches. The current x40i is very competitive and will - as it should - remain more niche than very hot versions of shopping cars from others, assuming they build on a CLAR-based 2 series. Of course BMW is capable of building a very, very hot "four". It's deep in their DNA, deeper than the others in fact. They didn't want to until now. Besides, sales of the halo products are pretty small compared to the top models; as you say it's a small selection of vocal enthusiasts for whom the range revolves around the top end. (BTW here the x28i and x30i are also "top end" and quite rare.) BTW I walked based a Model 3 in town earlier. It looked comical on the road, like a small apartment block. Totally out of place. There were but two charging bays nearby; one had a Leaf in it, the other was broken (no blue light). But I admit that says as much about the generally tired, under-invested and generally broken-down nature of Britain than the chronic dearth of EV infrastructure! |
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11-08-2018, 08:16 AM | #22 | |
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