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BMW defends cheaper, niche models

In defence: BMW Australia’s marketing boss Toni Andreevski said models such as the 2 Series Active Tourer and X4 crossover (left) are premium cars and earn their keep.

BMW say the brand is not being devalued by the arrival of cheap and niche models

24 Jul 2014

A STREAM of new niche models, more affordable cars and an upcoming front-wheel drive will not dilute BMW's premium image, according the the company's local marketing chief.

BMW recently confirmed pricing for the company's first front-wheel drive car, the 2 Series Active Tourer, will start from less than $45,000 when it goes on sale later this year.

BMW Group Australia general manager for marketing Toni Andreevski said entry-level models, such as the 1 Series and forthcoming Active Tourer can encourage buyers to stay within the brand as they change vehicles.

“We feel confident that, executed very well in a premium way, we can actually bring people into the brand and let them experience the BMW driving experience by owning one,” Mr Andreevski said.

“And the technical innovation you see in the cars is so high, irrespective of the segment in which they compete. Then there’s the design - at the end of the day a BMW must still look very elegant. That’s why with some of these new cars - even the 2 Series Active Tourer - you’re seeing what we believe is a benchmark design in that segment.”

Mr Andreevski said that any suggestions about the brand losing its premium image is unwarranted and while the company was offering more affordable vehicles, the sales data proves that BMW is retaining its exclusivity.

“In Australia, BMW’s market share in total would probably be somewhere between 2-2.5 percent – that’s still fairly exclusive by global standards and the whole luxury market in Australia probably accounts for close to 10 percent of the market. In Germany it’s probably 30 percent and I don’t think those brands are any less premium in those markets.”

Just this week BMW launched the new X4 coupe-style SUV, with a plan to mirror the success of the similarly styled, but larger X6.

The arrival of new models may cannibalise sales from other ranges, Mr Andreevski said, but he added that the company also needs to bring in new buyers as well.

“Every new model that comes has to earn its keep and if all it does is cannibalise from the existing range then it wouldn’t get up as a business decision.” As for outside threats, Mr Andreevski believes BMW has a comfortable lead over a number of re-energised premium brands, including Indian-owned British marque Jaguar.

“We’re always monitoring the competition. If we look at the first half of this year BMW has delivered close to 11,000 units (8.7 percent up), Jaguar has done 581 cars,” Mr Andreevski said.

“We always consider the various competitive threats but we’re a firm believer that BMW still offers the best combination of technical innovation, style, elegance and value in the premium segment as well as the best handling cars. So that’s what we focus on and we don’t worry about what others may be doing.”

BMW’s best-selling model is currently the 3 Series mid-sized range with 2213 sales since the start of this year to the end of June, while the X5 large SUV is not far behind on 2033 sales in the same period.

The X5-based X6 coupe SUV is considered by BMW to be one of its most successful niche products and sold 153 units this year.

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