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BMW says price war not a priority

Economy class: BMW says it is not interested in entering a price war with rivals after Mercedes-Benz slashed the price of entry to its A-Class range.

Protecting the band’s premium status comes ahead of cheapening it, BMW says

BMW logo28 Mar 2014

BMW says it is not about to enter a price war with rivals despite some aggressive moves that have shaken up the luxury-car market.

BMW Australia corporate communications general manager Lenore Fletcher told GoAuto that the brand was more interested in keeping its place in the luxury car hierarchy rather than chasing after its competitors.

“One of the things that we are very focused on at BMW is sustainability [of the market],” Ms Fletcher said.

“We’re also very aware of what our competitors are doing, but we are not wedded to it.”

Things have become very tight at the entry point to the three major brands, with BMW’s rear-drive 1 Series line-up, Mercedes-Benz’s sharp-looking, richly equipped A-Class and Audi’s A3 range all starting from $35,600 – a pricing benchmark reset with the introduction of the A-Class late last year.

Lexus, meanwhile, has this week said it would keep its facelifted CT200h range priced from $39,990.

The sharp pricing of the A-Class drew BMW Australia’s ire, with managing director Phil Horton saying Mercedes-Benz did not need to be so aggressive when setting the entry-level benchmark for the class.

“Clearly from that point of view, it was a very single-minded attempt to push into areas where that brand hadn’t been before and clearly to an extent they’ve [Mercedes-Benz] succeeded with that,” Mr Horton said at the time.

However, BMW would not look at undercutting its rivals in order to build more market share, Mrs Fletcher said.

“We have seen quite a large growth in the premium segment over 2013 and into 2014, and that’s been fantastic,” she said.

“From our point of view, we’re sustainable, we’re meeting all of our targets, We’re very happy with the fact that we’re growing in a market that is shrinking.

“One of the things we’re very conscious of is maintaining the value of the brand, and the brand obviously is a premium brand and we will maintain and sustain that,” Ms Fletcher said.

“The other thing is that we need to be sustainable to continue at a strong and consistent pace, so while there is a lot of different and quite extreme movement from some of our competitors, our goal is to continue to grow the brand, maintain the brand value, and to continue our sustainability and profitability.

“We’re meeting all our goals and we’re pretty happy with things.”

BMW Australia sales grew 11.5 per cent in 2013 – a strong figure, but only half that of arch nemesis Mercedes-Benz, which was up 23.0 per cent.

They are up a further 11.5 per cent this year too, and there are a raft of new models coming including the M3, M4, X4, 2 Series Active Tourer and i3. The 4 Series cabriolet, rear-drive X5 xDrive25d and 2 Series coupe have all launched in the past few months.

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