BMW to return Benz fire
BY MARTON PETTENDY | 8th Mar 2011
Enlisted to the top job at BMW Group Australia from February 1 after seven years as managing director of BMW Middle East, Mr Horton replaces Stavros Yallouridis, who resigned suddenly last November during the annual presidents’ meeting at BMW’s Munich HQ.
“We have a good team, we have a well established network and certainly as you might imagine one of the things Munich is looking for is that BMW can regain the number one spot that we lost to our main competitor last year,” he said at this week’s press launch of the new X3 – BMW’s most important new model this year – during his first appearance at an Australian national media launch.
BMW sold a total of 17,993 new cars and SUVs in Australia last year to be up 5.2 per cent in a market that lifted by 10.5 per cent overall. It was not enough to retain its dominance over Mercedes, which sold 18,272 cars and SUVs and a total of 22,329 vehicles (including commercials) – up 17.5 per cent on 2009.
BMW faces an uphill battle with just 2218 sales in the first two months of 2011 representing a dramatic 21.8 per cent plunge, although Benz has fared almost as badly with an 18.4 per cent sales slide with 2400 deliveries, including 1974 cars and SUVs, as the total market softened by 1.7 per cent overall.
“We’ve got a lot to make up,” admitted Mr Horton. “Last year was a tough year in a tough market and it’s one that’s not seeing a huge amount of growth at the moment. In the premium segment it’s certainly been very competitive. I certainly know I’ve got my work cut out for me.”
While the new X3 is expected to reverse its predecessor’s near-52 per cent sales decline while in run-out last year, every model in the line-up except the relatively new 5 Series and X1 is in serious sales decline in 2011 and, as Mr Horton points out, BMW’s volume-selling 3 Series is now in the last year of its model life.
“I think the product cycle isn’t helping us,” said the affable Englishman, whose final job in Dubai was to reintroduce BMW to Iraq – one of 14 separate markets in the Middle East, where only Afghanistan remains inactive for BMW – for the first time since the first Gulf War.
“When your bread-and-butter car – the 3 Series – enters the final year of its lifecycle, that’s never a great thing. Also 1 Series (hatchback) sells quite well and we’ve got the new 1 Series coming as well, so I think there’s a lot to do on the lifecycle side.
“Having said that, when we get both of those cars firing for us by the end of this year – early next year in the case of the 3 Series – we’ll have the youngest product range in the (luxury) segment, so there’ll be no hiding place then.”Before the redesigned 3 Series sedan goes on sale here early next year (following its reveal at the Frankfurt motor show in September), BMW Australia will release the new 6 Series Convertible in May, the all-new 1 Series five-door hatch and facelifted 1 Series Coupe and Convertible in October, and the next-generation M5 super-sedan in late 2011 after its global debut at next month’s Shanghai motor show.
Further afield, BMW’s new 6 Series Coupe and all-new 6 Series sedan will arrive here early and late next year respectively, while the first model to emerge from BMW’s ‘Project i’ skunkworks, the all-electric i3 hatch previously codenamed Megacity Vehicle, should head Down Under within a year of its 2013 release in Europe, North America and Asia.
While BMW’s first i-car will eventually be joined by the i8 plug-in hybrid super-coupe based on the Vision EfficientDynamics concept, 2013 should see BMW introduce its first front-wheel drive model. Codenamed UKL and potentially named the 0 Series to signify its positioning beneath the 1 Series, the all-new sub-compact model will share the same underpinnings as Mini’s third-generation Cooper.
In the meantime, BMW will face what Mr Horton, who says Australia is a country he has always wanted to work in and plans to stay beyond his three-to-five-year contract, describes as an unprecedented level of retail incentives – at least compared to the Middle East, where an “inverted triangle” sales chart sees the 7 Series outsell the X6, X5, 5 Series and 3 Series, and where the 1 Series and Mini models are not sold.
“I see a lot of activity in the premium segment you don’t normally see there, in terms of all of us pushing the market,” he said. “I saw a Mercedes ad at the airport offering 50 per cent down now, 50 per cent in two years.
“The whole market seems to be very driven by offers at the moment – us included. We’re doing price point advertising at the moment. But the market’s not exactly vibrant, when you look at the lack of growth year on year.”Mr Horton said that while the MkII X3 will be a vital player within BMW’s X-badged SUV model family – which routinely accounts for 30 per cent of all BMW sales in Australia, where a record 52 per cent of all BMWs sold last year were diesels – the X6 SUV-coupe had been an under-performer here compared to other markets.
“X5 is the top of the line SUV – except for X6, which for some reason hasn’t sold as well as it should,” he said. “It has strong appeal in markets like the Middle East, which has a massive focus on being the biggest and quickest and sexiest and newest.”The 30-year automotive industry veteran, who has also worked for Renault and Ford, said he hoped BMW would reverse the X6’s relatively lacklustre sales with a five-seat version comprising a rear bench seat, first shipments of which are imminent.
“The X6 is not something I’ve dug into yet. I think there’s probably some more opportunity for it,” he said. “There’s no doubt that on all objective elements if you’re going to buy an SUV you want to buy the X5, whether or not you need seven seats, because the capacity of that car is superior.
“(But) the X6 was always conceived as being a (Porsche) Cayenne beater and I just think there’s probably more opportunity for it with a stronger positioning of the car at the performance end of the SUV range.
“It should really sit at the top of the BMW X family and I’m not sure it has that clear positioning here, so if it comes across as being an X5 with less space… We haven’t done ourselves any favours in this market by not offering a (rear) bench seat so that clearly becomes a four-seater without the option of carrying five people and it lacks the functionality.
“Dealer feedback shows customers think it’s a great shape but not only does it lack the luggage space of the X5 but they can only fit two people in the back.”What’s coming from BMW:
6 Series convertible – May
1 Series hatch redesign – October
1 Series coupe/convertible facelift – October
M5 redesign – Late 2011
3 Series redesign – Early 2012
6 Series Coupe – Early 2012
6 Series sedan – Late 2012
