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Niche segments no problem: BMW

Niche work: BMW’s 4 Series Gran Coupe has proven to be a hit for the brand since its launch in June last year, with 384 units finding homes in 2014.

Complex range okay for BMW, but some underperforming models could go

11 May 2015

BMW will continue to explore niche segments in its line-up, but long-standing nameplates such as the 3 Series and 7 Series will remain the marque’s core models into the future.

In recent years, the German car-maker has expanded its range with new variants and body styles based on existing models to bolster its line-up and provide a wider choice for consumers – a strategy that its rivals Audi and Mercedes-Benz have also undertaken.

A number of BMW’s niche models are based on its passenger sedan line-up, such as the 3 Series/4 Series, which has expanded to six variants – 3 Series sedan, Touring, Gran Turismo, and the 4 Series coupe, convertible and Gran Coupe – but SUVs such as the X3 and X5 have also spawned coupe-style versions in the X4 and X6 respectively.

In an interview with Australian media last week, BMW senior vice-president of Asia-Pacific and South Africa Hendrik von Kuenheim said model proliferation is discussed “everyday” at the company but has proven successful in a number of markets to date.

“The 3 Series GT – 10 years ago it was never even discussed,” he said. “But in the Asian markets it has been very successful. It has a business class feel in the rear seat and it has been very well accepted in some markets. In other markets they are not ready for that now.

“There is a point when there is no more business case. When we think, what could we have done with that money, could we do something more successful with the money.”

In Australia, the new body styles and variants have had mixed success, with 317 3 Series GTs finding homes last year compared with 4588 examples of the 3 Series sedan and wagon, while the 4 Series Gran Coupe – a four-door liftback version of the coupe – provided BMW 384 sales in 2014 after just six months on the market.

In contrast, BMW shifted just 86 examples of the polarising 5 Series GT last year.

Admitting that some models were more successful than others, Mr von Kuenheim hinted that some “may disappear” in the future but did not go into detail.

He did, however, hint at future X-badged SUV models on the way, which will include the seven-seat X7 due in 2017/18 and could extend to a smaller sibling to the X4, dubbed X2.

“If we don’t offer choice, you might start losing. The question is: what is the next big niche? There are two more X models coming in the very near future, just because the consumer trend has gone that way.”

BMW last week released details of the mid-life update to its top-selling 3 Series range, and while he praised rival Mercedes-Benz’s latest C-Class, Mr von Kuenheim said the refreshed 3 Series range will compete well against it.

“Mercedes has a fresh product. It’s an appealing car. The good thing is, Mercedes is back. It’s … much better when you have a sharp competitor. It took them a long time to come back but they are back. There is nothing wrong with that because it keeps you on your toes.

“I am very confident … I believe we still have the ‘ultimate driving machine’.

We have a good facelift and some good upgrades and we will take the fight to Mercedes.”

BMW has not revealed local specifications for the updated 3 Series range, including whether it will offer the three-cylinder petrol engine found under the bonnet of the new Mini and the 2 Series Active Tourer.

BMW Group Australia managing director Marc Werner said last week the company had received “positive feedback” on the three-pot from Australian buyers, and while he would not confirm the triple for the 3 Series, he hinted at its possible inclusion in the range when the update lobs in early 2016.

“It has not been announced yet because we have some hours to go but certainly we are continuing with our three-cylinder strategy,” he said.

“We absolutely see very, very positive feedback since we have launched the three-cylinder engine in this market.” Mr von Kuenheim said BMW’s luxury flagship – the 7 Series sedan – would continue to be the showcase for its latest technological advancements, despite a consumer shift towards luxury SUVs.

He said the rollout of comfort and safety advances in cars is so rapid that a company might only have exclusivity on the innovation “if you are really lucky for six months” but added that the large sedan would always showcase new technology first.

“The 7 Series will always be the technology leader,” he said. “We will get a lot more frequent updates on the cars as new technology comes. It will always be the pinnacle, as it is for Mercedes S-Class, which is also a bloody good car. That is the total competence which is available in the German motor industry.”

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