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BMW considers 2017 successful despite sales downturn

Show me the money: Playing a role in safeguarding BMW Group Australia's profitability, the 5 Series found 1245 homes in 2017, up 128.4 per cent year-on-year, mostly due to the release of its seventh-generation model in March.

Profitability, not sales volume key to future of BMW brand in Australia: Werner

16 Feb 2018

DESPITE a sizeable decrease in sales for its BMW brand last year, BMW Group Australia says 2017 should be considered a success as it continues to transition from an automotive marque to a technology company.

Speaking to journalists at the i3s national media launch in Warrandyte, Victoria this week, BMW Group Australia CEO Marc Werner cautioned against describing the recent performance of the BMW brand as a disappointment.

“2017 was a period of consolidation for the BMW Group here in Australia. And while there was a 16 per cent downturn in the sales for the BMW brand during the year, the stabilisation of the Mini and Motorrad brands meant that the Group overall, as a whole, operated successfully from both a sales volume and, even more significantly, a profitability basis,” he said.

Specifically, the BMW brand sold 23,619 vehicles last year, representing a 15.7 per cent drop over the record 28,028 deliveries it made in 2016.

Ushering in its third-generation model in November, the X3 mid-size SUV was the best seller for BMW, moving 3671 units – equating to a 4.0 per cent dip year-on-year.

It was closely following by the X1 small SUV (3658, down 10.6 per cent) and X5 large SUV (3582, down 14.3 per cent).

Among the brand's traditional volume sellers, the 3 Series mid-size car (2584, down 35.0 per cent), 2 Series Coupe and Convertible (1750, down 18.9 per cent), 1 Series small hatchback (2105, down 18.0 per cent) and X4 mid-size SUV (1500, down 13.5 per cent) took the largest hits.

The lone bright spark for BMW was the 5 Series large car which found 1245 homes – a significant 128.4 per cent year-on-year improvement – following the release of its seventh-gen model in March.

Mr Werner highlighted the BMW brand’s growth over a longer period of time as a cause for celebration, regardless of its regression in 2017.

“The BMW Group is committed to a long-term and stable growth in the Australian market, and this is evident by our strong and consistent upward trend across the past seven years,” he said.

“From 2011 when we sold just 18,000 BMW vehicles to 2016 when we sold more than 28,000, our BMW brand achieved a 52 per cent growth in this market.

“Factor in the somehow 24,000 BMW sales from 2017 and it represents a solid growth of 33 per cent over that (seven-year) period. That’s impressive, and that’s considered increases.”

BMW stands to bounce back this year with the release of several new models, including the facelifted i3 light hatchback this month, the first-ever X2 small SUV next month, the second-gen X4 mid-size SUV in the third quarter and the reborn 8 Series sportscar in the latter stages.

While Mr Werner did not offer up any sales forecasts for 2018, he stressed that BMW Group Australia’s achievements in 2017 will positively impact the BMW brand this year and in the future.

“The year of 2017 played a strong role in future-proofing the BMW brand in Australia. During the year we focused on consolidating the BMW Group businesses – including our three automotive brands, our financial services arm and, in particular, our dealer network – and the results will come into play during 2018 and beyond,” he said.

“So, from a financial viewpoint, we make no secret that profitability is critical for the company’s operations both today and as well into the future.

“Given that BMW is recognised as a world leader in innovative concepts such as electrification and autonomous driving, it is necessary that we continue to maintain a profitable basis to safeguard the investment in our extensive R&D programs.

“This means operating within the sweep spot of volume and profitability, and not trying to achieve volume at any cost – a practice used by many brands and which always ultimately ends in tears.”

BMW was bookended by its rivals in the premium market last year, with Mercedes-Benz Car and Vans sales up 4.4 per cent, to 42,489 units, while Audi sold 22,011 vehicles, down 9.3 per cent.

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