BMW X1 goes hoi polloi

BMW’S smallest SUV to date is also its least luxury orientated, with sub-premium pricing that will place the E84-series X1 in company with mainstream offerings of comparable sizing and packaging from Toyota, Subaru, Mazda, Nissan, and even Hyundai.

“This is a first for us,” BMW says, as it seeks to lure younger buyers, more female buyers, affluent empty nesters, and couples with small children.

Priced from $43,500 for the base sDrive18i manual, the X1 undercuts Asian rivals such as the RAV4 Cruiser L, Forester XT Premium, CX-7 Luxury Sports and X-Trail Ti.

Hyundai’s new ix35 – arguably the most conceptually similar compact SUV to the BMW as far as styling and packaging are concerned – isn’t too far behind either, topping out at a heady $37,000 for the highly equipped AWD all-wheel drive Highlander diesel auto.

As a result of the move downmarket, BMW says, the X1 will outsell its 1 Series hatch in Australia, as it exposes the Bavarian brand to the third most popular vehicle class, after the small and light cars which collectively make up around 35 per cent of all sales.

This year the compact SUV segment accounts for about 10.5 per cent, but is also showing the biggest growth so far at 1.4 per cent.

Perhaps surprisingly, two compact SUV rivals do not overlap with the X1 are Volkswagen’s smash-hit Tiguan and the latest Honda CR-V – although the latter’s pricing has only just slipped outside of the BMW’s sphere as a result of a facelift and value drive following a disastrous sales slide last year.

While some critics may argue that the sDrive18i is only rear-wheel drive against the others’ AWD, BMW counters back by pointing out that every version includes a full suite of safety gear such as airbags and stability control for a five-star crash-test result, EfficientDynamics-aided EU5 emissions-rated engineering, dual-zone automatic air-conditioning, cruise control, rear parking radar, 17-inch alloy wheels on Runflat tyres and Bluetooth phone connectivity as standard equipment.

For now, the least expensive X1 AWD is the $52,700 xDrive20d manual.

Further putting the baby BMW SUV’s pricing in perspective, the cheapest Volvo XC60 3.2 AWD kicks off from $56,950 while the Audi Q5 2.0 TDI quattro AWD commences from $60,500.

However, it is widely speculated that cheaper front-wheel drive-only versions of most compact SUVs are in the pipeline for Australia over the next 12 months as a result of the abolition of the tax break enjoyed by AWD/4WD vehicles. This could erode the newcomer’s value quotient as prices for many of the X1’s mainstream rivals fall. Furthermore, stiff competition is in the pipeline in the shape of the upcoming Audi Q3 that is thought to be based on the Volkswagen Golf platform, as well as the much rumoured Mercedes ‘MLK’ sub-GLK SUV. Even the Mini Countryman due in the second half of this year will provide in-house competition.

But BMW estimates that only about 10 to 15 per cent of X1 buyers will choose the entry-level versions anyway, with the sDrive18i cheapie serving only as an inducement to bring people into showrooms. The reality is that three out of four customers will probably go for the mid-level 2.0-litre common-rail four-cylinder diesels in single-turbo 20d and twin-turbo 23d guises. The latter starts at just under $60,000.

Nevertheless, BMW is expecting up to 80 per cent of X1 buyers will be new to the brand. Since most will be “non premium buyers” (as BMW marketing general manager Tom Noble puts it), this may create a conquest rate that even exceeds that of the X5, its first venture into the SUV segment some 10 years ago.

Fuelling this confidence are the 3000 individual enquiries the Australian arm has received since last year.

"It is not such a big step from the top end versions of vehicles like the Subaru Forester, Toyota RAV4 and Honda CR-V," Mr Noble says.

“So far sales have been running at over 100 per cent more than forecast in Europe,” he added, necessitating a delay of the X1’s US launch to satisfy customer demand.