BMW increases X5 value to foil M-Class
BY HAITHAM RAZAGUI | 8th May 2012
It is BMW’s response to the move by Mercedes-Benz to introduce a lower-priced, four-cylinder entry-level ML250 variant to its new and more generously equipped M-Class line-up, which undercuts the least expensive X5 by $10,700.
And Lexus – which is about to launch a facelifted RX – is in the meantime offering the entry-level RX350 Prestige for $79,900 drive-away, compared with the original price of $82,814 plus on-road costs.
The Japanese brand has also cut $8500 from the price of its larger Toyota LandCruiser-based LX570 while adding more features.
Audi has made no similar moves to boost its ageing Q7 in Australia, but corporate communications executive Shaun Cleary told GoAuto the company will “react as necessary” to continue offering customers value, but is aware of the need to secure future resale values.
A new Q7 is on the horizon but no official announcement has yet been made. Like the next-generation Range Rover, the Q7 replacement is expected to be hundreds of kilograms lighter.
“Audi’s overall strategy is to offer efficiency gains with each new model,” said Mr Cleary.
“Certainly lightweight technology is something we have spoken about and demonstrated in many new models as one way of achieving that.”BMW Group Australia head of corporate communications Piers Scott told GoAuto the addition of the Innovations package brings the X5 much closer to the $81,400 Mercedes ML250 and $99,000 ML350 in terms of value for money.
On the base X5 30d, which has a list price of $92,100, the Innovations pack includes satellite-navigation, a head-up display, reversing camera with top view function, an automatic tailgate, bi-Xenon headlights with automatic high-beam, memory for the electric seat adjustment and electrically folding self-dimming mirrors.
Mr Scott said the value of the Innovations pack diminishes further up the range, where more of the features are already standard equipment.
The M-Class has standard sat-nav, reversing camera and self-parking across the range, while the mid-spec ML350 that competes most closely with the X5 30d on performance – and now equipment as well with the BMW’s Innovations package – is $6900 more expensive.
The ML350 goes some way to justifying the price difference with the inclusion of blind-spot monitoring, lane-keeping assistance and radar-based collision avoidance and mitigation technologies – plus the aforementioned range-wide standard self-parking system.
Mr Scott said the repositioned X5 represents a “compelling” competitor to the ML350 and the extra equipment brings the least expensive X5 closer to the ML250 in terms of pricing while providing a “substantial benefit” in terms of power.
But he conceded that the X5 and M-Class still do not directly compete on price and equipment.
“For the first time, we are not as directly aligned as we once were,” he said.
Mercedes-Benz claims the lower pricing and fuel consumption of the ML250 enables it to appeal to customers considering products from the next size down such as the BMW X3 and Audi Q5, a segment it cannot compete in due to the absence of right-hand-drive GLK production.
However, Mr Scott believes the customer bases are too different.
“Obviously Mercedes does not offer a GLK in this market, so I can see why they would be hoping to do the job with one car,” he said.
“We tend to feel that they are quite distinct customer bases and that the mid-sized SUV customer is after something a little different across all measures, power, fuel economy, size, space and manoeuvrability.
“Those that choose an X5 want the lifestyle capability and practicality that the X5 offers and, being a larger vehicle, a premium is placed on power within that segment as well.”Mr Scott said no four-cylinder X5 is in the pipeline for the current-generation model.
BMW this week introduced a turbocharged four-cylinder petrol version of the X3 28i to replace the brand’s naturally aspirated straight-six unit, resulting in the only six-cylinder X3 being the flagship 30d variant.
The resulting improvement in fuel consumption on the X3 28i is offset by a $1000 price rise as part of a range-wide upward price realignment, but the variant now comes with standard sat-nav, which was previously a $2000 option.
BMW Australia sold 5415 vehicles in the first four months of this year, a modest increase of 1.6 per cent, with X5 sales down 14.7 per cent but X3 sales up 93.5 per cent.
Lexus is up 5.1 per cent to 2110 sales, with RX down 0.4 per cent and LX up 34.1 per cent.
Following a great 2011 with sales up 12.5 per cent, Audi has sold 4339 units year-to-date, down 19.5 per cent, with all models but the A6 sedan (up 38.5 per cent) registering significant decline.
Including commercial vehicles, Mercedes-Benz is up 2.8 per cent with 6174 sales, while passenger-vehicle sales are steady at 4885 units YTD.
