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BMW expects to continue growth in 2020

Rising tide: BMW Australia believes it can continue its sales growth against a struggling market for the second year running.

New product to help BMW continue to buck industry’s downward sales trend

25 Feb 2020

BMW Group Australia has its sights set on growth in 2020, continuing the trend it set in 2019 by increasing its overall sales in the face of a market that has endured two years of negative growth.

 

The German premium brand increased its overall sales volume last year by 1.1 per cent, climbing from 23,055 units to 23,307, despite overall new-vehicle sales falling considerably by 8.7 per cent.

 

In an interview with GoAuto, BMW Group Australia CEO Vikram Pawah would not be drawn on exact sales targets for the brand this year, but was bullish on its chances to continue going against the grain of a sluggish market.

 

“I’d love to give you (a sales target) if you can give me the number of what the economy’s going to look like and how the industry’s going to be, but what I can tell you is – there’s a lot of variables, there’s going to be a lot of unknown things in the economy and the industry, but we’ve been very clear that no matter what happens we will deliver a growth better than 2019 for sure, I can tell you that,” he said.

 

Along with increasing its sales overall, the brand will also push to increase its share in the luxury market, which was up to 25.9 per cent at the end of January (+2.7%) and a strong start after posting a 24.0 per cent share for calendar year 2019.

 

“We’ve been growing our share consistently, I think in 2019 we grew our share about 1.4 to 1.7 per cent, we’re growing further in January and I think by the end of the year we will increase the share overall,” said Mr Pawah.

 

Asked whether growing BMW’s share will result in leadership of the premium market, Mr Pawah said segment leadership was not the brand’s goal, and would instead focus on providing a quality experience for its customers.

 

BMW would have a difficult time unseating its rival Mercedes-Benz as the best-selling luxury brand in Australia, with Benz chalking up 31,985 sales, more than 8000 ahead of BMW.

 

A large part of BMW’s recent success has been with its SUV range, with models like the X5, X3 and X1 adding valuable volume to the brand’s bottom line in 2019, and in the case of the X3 that success continued into the first month of 2020 as the best-selling luxury medium SUV.

 

The X5 was trumped by Mercedes’ new GLE in January as best-selling large SUV (331 sales vs 260) but has had a stranglehold on the segment in recent years, and Mr Pawah said he expects BMW to lead the luxury SUV space by “miles”.

 

“Our aim is to grow and grow our market share automatically, so yes we have been leading in a lot of segments historically, we will continue leading in them,” he said.

 

“I think when we look at last year we were leader in the SUV segment overall by miles, and I can tell you we will continue leading that space because we created that space with the X5.”

 

BMW also filled some gaps in its product portfolio that have helped it play in more segments, with the brand’s current model line-up arguably the broadest in its history.

 

“We had a few gaps in the line-up for segments we did not exist in,” said Mr Pawah.

 

“So for example the X7 when we launched, we covered that gap, in March you will see us launching the 2 Series Gran Coupe, that’s going to bridge a gap in the entry-level sedan segments as well, obviously the 8 (Series), the Gran Coupe and all of that luxury racer kind of a feel – what we call the luxury line – that’s all there as well.”

 

In order to achieve continued growth, BMW is continuing its aggressive product expansion that last year saw 17 new models or variants launched across both the BMW and Mini brands.

 

That expansion is set to continue into 2020, with 16 new offerings touching down over the year to keep the BMW range fresh.

 

Mr Pawah said that by the end of 2020, the oldest model in BMW’s line-up will be its best-selling X3, which first arrived in local showrooms in November 2017.

 

This year will be a big one for BMW’s M performance division, with a number of coveted models set to touch down including the M8 Competition, M2 CS, M550i and a raft of Pure variants for the M340i, X2 M35i, X5 M and X6 M.

 

In 2019, local BMW M sales totalled 4288 units – a significant improvement of 28.8 per cent over 2018, with around 20 per cent of all BMW Australia sales being made up of M-branded products, the highest proportion in the world behind New Zealand.

 

Globally, M sales grew a massive 32.2 per cent to 135,826 units – the best haul for the performance division in its 50-year history.

 

Mr Pawah said the decision to expand the range of M Pure offerings was made from speaking to customers who were looking for performance without the greater expense of luxury trimmings.

 

“I was talking at some customer delivery days and talking to the customers, they say ‘I love the M product, but I don’t want to pay for stuff that I don’t want’, so I asked them what they mean by that,” he said.

 

“(They said:) ‘Why would I want soft-close (doors), I want it for its performance, I don’t want luxury, I want performance.’ So that’s why we decided, let’s launch the M Pure product.

 

“We took some time, made sure the specs are right, and we could create a customer price point where the customers give us a big thumbs up.”

 

Mr Pawah also said he expected “phenomenal growth” for plug-in hybrid and EV sales in 2020, with 80 per cent of the company’s line-up to be electrified over the next 12 months.

 

BMW has plans to offer 25 electrified variants by 2023 with 12 of those to be fully electric, however Mr Pawah would not be drawn on whether the company has set a target for electrified sales by that time.

 

He did say that the brand would look to bring as many electrified variants Down Under as possible, in order to offer customers the greatest possible choice.

 

“I have said we will raise our hand for each and every one of them that we can sell in Australia,” he said.

 

“And we would like to make all 25 of these available to our customers, but there is a bit of groundwork to do in creating awareness in these products first.”


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