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No magic million sales this year: BMW

Tough times: BMW Australia managing director Phil Horton thinks the Australian new vehicle market will fall shy of the one million mark this year.

Car sales slip a gear, with BMW predicting tough task to achieve industry million

2 Sep 2011

AUSTRALIAN automotive sales will fall short of the million-vehicle mark this year, according to BMW Australia managing director Phil Horton.

He said that despite positive indicators on the economy, potential car buyers were picking up on bad vibes in the news and keeping their wallets closed.

“The market is pretty challenging at the moment,” he told GoAuto at the Australian launch of the 1 Series M Coupe in Victoria.

“It surprises me how much bad news there seems to be around and how quickly people are to pick up on bad news.

“So the overall market is not strong, versus last year, which took us by surprise.”

Even as recently as last month, the Federal Chamber of Automotive Industries – Australia’s peak motor industry body – predicted 2011 sales of about one million units, but slower sales in August have caused pause for thought.

Mr Horton said BMW had expected to enjoy a sales increase this year, but currently was “doing it tough”, as were most motor companies.

“So for the rest of the year, the market will certainly be under a million,” he said.

 center imageLeft: BMW Australia managing director Phil Horton. Below: BMW X3 and 5 Series sedan.

“And I think most people seem to be predicting that way, which is a shame, seeing that most things seem to be going positively for the economy. But it doesn’t seem to be wearing well.”

Mr Horton declined to put a figure on BMW’s original sales target for 2011.

“That’s a closely guarded secret, because we are in a pretty intense competition with our friends, but I think we will end up at least five per cent down on where we thought we would be,” he said.

To the end of July, BMW’s Australian sales are down five per cent on last year’s tally, at 9804 units, while direct rival Mercedes-Benz has suffered a 7.1 per cent decline, to 11,645 (including commercial vehicles).

Counting just passenger vehicles and SUVs, BMW leads Benz, 9804 to 9313.

However, up and coming Audi has closed the gap on both of its fellow German marques, with sales up 9.4 per cent year to date, to 9024 units.

Asked if BMW would finish the year ahead of its prestige rivals, Mr Horton said: “Yes … very yes.”“We got the new 1 Series (Hatch) coming, and that will come into the market in October, so we will get a boost from that, and we are just going to make sure generally that we are in there, that we have got the right level of support in for the dealers,” he said.

“The dealers are pretty fired up about it as well, so we are pretty comfortable.

“We are ahead at the moment, so there is no reason why we shouldn’t carry it to the end of the year.”

Mr Horton said BMW sales this year had been hurt by its model cycle, with many volume sellers in their last days.

“As with all car companies, the product life cycle is an important thing,” he said. “We are really now starting into the run-out of the 3 Series, which is traditionally our volume seller, so that car certainly coming off its peak – 1 Series as well.

“On the positive side, we have had the X3, which has really hit the market very, very well. It is probably performing above our expectations, but it is tough.

“Customers are out there looking for a deal, and it doesn’t matter if you are Mercedes, Ferrari or Kia or Hyundai, everyone wants a deal at the moment.”

Mr Horton said it was too early to predict how the market would shape in 2012.

“I have to think it is going to be more positive than this year,” he said. “You just have to be optimistic about it, but that’s the way we are seeing it.

“But certainly from a product life-cycle, we will be in a stronger position come March next year, than we are now, if only because of the 3 Series.”

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