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BMW to buck downward sales trend

Steady March: Though BMW Group Australia sales have so far been soft in 2019, this month will see the launch of the new-generation 3 Series that is expected to give the Bavarian brand sales a shot in the arm.

Product value and customer-centric approach to keep BMW sales steady in tough market

BMW logo19 Mar 2019

BMW Group Australia will launch around 10 new models this year in a bid to stymie the shrinking local new-car market, focusing on passenger car offerings after last year’s SUV onslaught for a more well-rounded product portfolio.
 
With a year-end tally of 23,055 units in 2018, BMW Group Australia’s sales slipped 2.4 per cent compared with the previous year, but this remained well below the overall 7.3 per cent downturn of the premium car market.
 
Speaking to journalists at the launch of the new-generation 3 Series last week, BMW Group Australia chief executive Vikram Pawah said the Bavarian brand will “buck the trend” of the market this year.
 
“It (growth) depends on the economy, but we’ll clearly buck the trend in the sense that if the drop is there, we’ll have a lesser drop, or if there is a growth, we’ll have a higher growth,” he said.
 
“What happens in these situations when customer sentiment is down, what do you do as a consumer? You definitely need a replacement vehicle; do you never buy it? I don’t think that’s the case.
 
“As long as you have a compelling reason to replace it, you will. So, I think that’s where the answer lies, as long as we are doing that, as long as we are giving reasons and opportunities for customers (to replace their vehicle).”
 
So far this year, BMW has continued its downward trajectory, falling 5.2 per cent in the first two months to 3907 sales, but Mr Pawah expects the brand’s fortunes will reverse as fresh product, including the new-generation 3 Series, starts hitting the market.
 
“2018, if I look back at how the year was, it was the start of a product offensive, and especially the X (SUV) product offensive,” he said. “Now we get into our passenger cars, we start our product offensive for passenger cars segment and that’s why you see 3 Series.
 
“I know we have this debate about, ‘it’s an SUV market, what’s happening with sedans’, but clearly 40 per cent of the market is still sedan (passenger cars), remember that.
 
“So clearly there is a market … And it won’t just stop there, there is the halo model with the 8 Series coupe and convertible that just started sales this weekend, and then the Z4 follows through as well.
 
“We’ll keep on launching plenty of new models. If I look back at 2018, I think we launched roughly 10 models across the year; 2019, we will repeat it again with another 10 models.
 
“As you can see, (there is) lots of focus on the product and we feel that if we are able to launch these models, we will be able to negate whatever economic impacts are in the market.”
 
Last year, BMW Group Australia launched three fresh SUVs in the form of the X2, X4 and X5, while also updating its X1 and enjoying the first full year of its third-generation X3 that hit the market in late 2017.
 
As a result, BMW’s line-up of X SUVs notched up 13,567 sales in 2018, up 5.4 per cent on 2017 and accounting for 58.8 per cent of the brand’s total volume. 
 
BMW also last year updated its i3 electric hatchback, consolidated its 2 Series Active Tourer range, introduced the entry-level 620d GT and brought the Competition-spec M2 and M5 pair to market.
 
Looking ahead, BMW has already confirmed the 320i, 330e and xDrive M340i grades of the 3 Series will land in local showrooms before year’s end, while the hulking X7 upper-large luxury SUV and facelifted 7 Series are due to launch around mid-year.
 
The M-fettled X3 and X4 mid-size SUV pair will also hit this year, powered in Competition guise by a 375kW/600Nm 3.0-litre twin-turbocharged six-cylinder engine that is also expected in the next-generation M3.
 
Mr Pawah confirmed the 1 Series hatchback is also now in runout ahead of an anticipated new-generation model reveal at the Frankfurt motor show in September.
 
The new-generation 4 Series coupe could also break cover before the end of the year, while BMW’s 5 Series large sedan and wagon range is now approaching nearly three years since its debut, meaning a refresh should be coming soon. 
 
“(Over the last four years) there were so many SUVs that were introduced into the industry, not only from us,” Mr Pawah said.
 
“We feel that as we launch more sedans, we might see some trend balancing on the other side.
 
“Where it will sit exactly? Very difficult to guess without a crystal ball, but I will say, 60 per cent where it’s sitting, is probably good.
 
“I don’t expect it to dramatically increase from that because I think we have a really good line-up of passenger cars coming through as well, for us … we should be able to have a better balance in the end.
 
“The idea to offer customers, at a similar price point, either an SUV or sedan – that’s the intention.”
 
Mr Pawah chalked up the new-car market slump to “many macroeconomic scenarios” such as falling house prices, credit availability and political uncertainty, but is confident the automotive industry will bounce back.
 
“I think it’s a cyclical thing. For us, we’re focused on how we look at our customers, how we are being customer-centric, offering them value – and if we are doing that, we’ll find our way through this, easily,” he said.
 
“If we keep on thinking about what is going to happen to the market, I think we are going to go into a tailspin.
 
“These kinds of softening of the market happen all the time around the world, and we’ve seen that with a lot of other manufacturers.
 
“We also know very strongly that we can overcome these things if you are offering the right value to your customers.
 
“I think as we are launching new products, offering these new values to customers, there are still people interested in buying new products, that’s what gets foot traffic into dealerships, we know that.
 
“With this kind of product offensive, we are very confident we can beat the trend this year.”

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