BMW’s niche-way bet
BY BYRON MATHIOUDAKIS | 13th Oct 2008
Ian Robertson, former chief executive of Rolls-Royce and now a member of the BMW Group board for sales and marketing, says that success stories like the ‘X’ cars and the 1 Series prove how strong BMW is at identifying and exploring new market segments.
“Two to three years ago, when we were conceiving the X6, there was no suggestion of a coupe in the SAV (Sports Activity Vehicle) segment.
“It has hit the sweet spot for us... it is sold out the world over, and it has added more and more credibility to the niche concept that we’ve been very good at developing.”Speaking to GoAuto at the Paris motor show earlier this month, Mr Robertson said that he expects an equally strong consumer reaction to its most compact SUV, the X1.
In fact, the company is relying on the model to go a long way in achieving its record sales goals.
BMW used the show to debut its X1 Concept – a thinly disguised prototype of the 1 Series-based soft-roader due out in the middle of next year.
“If you look at what has been happening in the world today, we think that an X1 concept is another area where we can continue to see growth.
“As such, it has a unique position, in the same way that a 1 Series has gone from a five-door to a three-door to a coupe to a convertible - people will now have a family of BMW X products as well.” So, has BMW become the world’s largest maker of niche vehicles?“I think in some respects you could say that,” Mr Robertson admits.
“We have been exceedingly successful at exploiting niches.
“You know, you can go back in history and say that we were the first car company to develop the first premium segment in terms of 3 Series (in 1975), and that spawned from the (BMW) 2002 days and so on, and more will follow.
“Clearly, when we entered the X segment with the X5 (in 1999) and brought on-road capabilities to the off-road concept, again, people have followed.
“And I fully expect more people will come (the X1) way too. Audi is following suit with their product line-ups as we speak.”BMW is also confident that its more traditional luxury car offering, the 7 Series, can contribute strongly to its annual sales volume growth aspirations, as well as the financial bottom line.
To that end, the Paris show was also the venue for the latest, fifth-generation F01 7 Series launch.
Industry analysts questioned the wisdom of BMW’s vast investment in an all-new luxury limousine – which has been completely redesigned from the ground up – at a time of unprecedented environmental concern coupled with exceptionally uncertain uneconomic times.
“A number of people have asked us ‘is there room for bigger cars and bigger engines?’ and I think the answer to that is yes there is,” Mr Robertson revealed.
“But we need to keep moving it down this curve of more efficiency and so on, without breaking away from the reasons why people buy these bigger cars, and I think we are showing that this can be done.”Mr Robertson believes that BMW must not lose sight of what it does well – which is premium vehicles, be it in the city-car segment like the Mini, or the most exclusive luxury car in the world (Rolls-Royce).
“The one thing that is certain is that we intend to maintain our position in the premium sector rather than in the wider car sphere.
“So whether it is a 1 Series, whether it is a Mini, or whether it is a Rolls-Royce, we are always going to be pitched at the top end of the product segment of that particular derivative of car.”Will BMW sales match the record 1.525 million units it achieved in 2007?“The year is not over yet. At the end of the day, the world is facing a number of hurdles at the moment.
“If you would have tried to forecast what has happened in the last month, I think you would have put long odds onto what has actually been unfolding.
“But we are still tracking plus-minus where we were last year, we continue to take actions according to what is happening in the market, and the there is still three months to go.
“And I expect to get to 1.8 million vehicles in the not-too-distant future.
“All of these things are still on track despite the challenges in the world in 2008. Our focus remains very clear on where we are heading as a company.”“If you look at... the full range of (new) 7 Series, and we’re rolling out the facelifted 3 Series. Now given that this is our strongest seller, and given that we have been selling the previous design (with pictures of the new one already out) over the last month or so, that will give us (a lift to the end of the year).” Unlike some rival marques, BMW will not resort to discounting its vehicles, according to Mr Robertson.
“I’d rather concentrate on what we do rather well, rather than reacting to what is happening on a day-by-day basis.
“Some manufacturers at the moment are taking actions that in the long term will damage their brand. BMW has a focus on clearly what we have to do this year, but at the same time where we need to be. And from that respect... we will continue to support the brand in the way that it should be supported.”
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