New-model rollout to stem BMW sales tide

BMW Australia chief executive Marc Werner says the car-maker’s slow sales performance so far this year is due to a lack of all-new product and a downturn in the overall premium segment Down Under.

However, he said a new-model onslaught that kicks off later this year will help reverse the tide and help put BMW in a better position as it approaches the end of the decade.

Speaking with GoAuto at the launch of the 530e plug-in hybrid sedan in Sydney last week, Mr Werner declined to nominate a 2017 year-end target for the German brand, but highlighted the changing market conditions that have impacted BMW sales this year.

“As you can clearly see there is some shift in the market, in the premium segment as we have seen in first couple of months,” he said. “Whether that is going to continue, that remains to be seen. There are certainly some dark clouds on the horizon as far as economic outlook is concerned. So we have to be careful as far as our volume ambitions are concerned. And our profit aspirations.

“BMW, as you know from global communications, are extremely cautious in finding the right balance between volume and profit. Not only for a foreign manufacturer, but in particular for our dealer network. So that is what is on our daily review.”

According to official VFACTS sales figures, BMW has sold 10,231 units to the end of May, representing an 18.3 per cent drop compared to the same period in 2016.

Last year the car-maker captured a record 28,028 sales in Australia, a 12 per cent lift over its previous record in 2015.

Backing up Mr Werner’s claims, other premium brands have also lost ground in Australia this year, with Audi down by 13.5 per cent, Lexus off by 2.3 per cent, Land Rover 13.4 per cent behind the first five months of 2016 and Volvo down 22.7 per cent.

A few premium players are ahead this year, including Mercedes-Benz (+3.9%), Porsche (+3.0%), Jaguar (+15.7%) and Alfa Romeo (+7.8%), although the latter two were coming off low bases.

Interestingly, luxury and sportscar marques at the highest end of the market such as Bentley, Rolls-Royce, Maserati, McLaren, Ferrari, Lotus and Aston Martin are all in positive territory, with some experiencing double or triple-digit growth this year.

Mr Werner explained that BMW was currently in the middle of a slower period in terms of new product launches which had also impacted its 2017 year-to-date sales figures, but added that a significant new-model rollout would gain pace later this year.

“On top of that (premium segment downturn), we face a substantial update of our product portfolio going forward. So it is product life cycle-driven. There are always ups and downs and we are preparing for this product onslaught, which will keep us busy from quarter three, 2017 to 2021.

“We are going to be extremely busy and we have high expectations as far as all those new cars are concerned, which a majority of my management team has already seen and are extremely excited.”

He said that 2017 was more about preparing for BMW’s mid-term future than chasing outright volume in Australia.

“This year is really about preparing for the future and doing a bit of a reset.

This year is about getting everyone on board to make the most of all of the forthcoming product launches.”

Later this year BMW will launch a new version of the X3 mid-size SUV, while other key new models expected to launch in the next six to 12 months include the X2 crossover early next year, and the new-generation version of the polarising 5 Series GT liftback late in 2017.

Further down the track, a new 3 Series is expected, as is a new 1 Series hatch and potentially a sedan, a replacement for the Z4 sportscar co-developed by Toyota, the recently confirmed 8 Series and the X7 seven-seat SUV.

So far this year, just three models in BMW’s line-up are in positive territory – the just-launched 5 Series which is up 197 per cent, the i3 electrified city hatch up 33.3 per cent, and the swoopy X4 crossover, which has risen by 15.2 per cent.

Mr Werner said there was less of a focus on individual models performing well in the line-up, with more emphasis placed on having a balanced portfolio.

“It is really balancing the portfolio. Each and every car that we have in our portfolio has a reason to be there. And having said that it is really about finding the right balance. At end of the day it is the customer who decides.”