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German manufacturer BMW has slammed its chief rival’s efforts in the utility market as appalling and disappointing, while also confirming it too has studied the idea of producing its very own light utility vehicle.

Speaking to Australian media at the Frankfurt motor show yesterday, Hendrik von Kuenheim, senior vice president of the company’s Asia, Pacific and South Africa region – where he also oversees the Australian market – said he expected more from Mercedes-Benz.

“When you look now at our German competitor from Stuttgart, I think that [X-Class] product is appalling. You would have expected something more serious, this is for me… very cheap, very plastic, not very much Mercedes-like,” von Kuenheim said.

“I saw that car in Geneva [motor show] and I was very disappointed. They can do better. They build fantastic cars but this one was a disappointment.”

The Mercedes-Benz X-Class, which shares its architecture with the Nissan Navara, was the German brand’s first entry into the light pick-up market – even though, unlike BMW, it has a very strong presence in the trucking scene.

Despite his criticisms of the X-Class, von Kuenheim admits the market has now shifted enough that building a ute is no longer an image issue for BMW, much like how it controversially entered the SUV segment many years ago as one of the first players.

“The fundamental question is now segments, how are the segments developing. I remember heated discussions twenty-something years ago when, [we said] ‘does an SUV fit to a BMW [brand]?’

“Now we have an X1, X2, X3, 5, 6, X7 and who knows what else is coming? So the market and customer demand is changing.

Nonetheless, von Kuenheim feels BMW is now at a crossroads where it has to consider its investment very wisely, for it is at a tipping point of technological change both with electric mobility and autonomous driving – so it cannot commit to every opportunity, even one as large and potentially profitable as a ute.

“At the moment, manufacturers make the money in the cars, you see. We need to continue as manufacturers to invest in diesel and petrol engines but we also need to invest in hybrid cars where there is enormous engineering expense and we need to invest in electric cars – which, if you look at Tesla, is not really much of a profit opportunity.

“We need to invest in autonomous driving and fuel cells, but we are [currently] making money only on traditional petrol or diesel cars, so the financial cost of any company in the car business at the moment is definitely the highest it has been in the last 100 years.

“Traditionally, we used to only invest in diesel and petrol, but now we invest in all the other sectors where the stream of revenue is years and years away, so you need to prioritise yourself.

“From all the priorities, the pick-up is maybe not number one or number two program.”

Above: a speculative BMW pick-up rendering, by Rain Prisk

Though it may not be at the very top of the priority list, von Kuenheim admitted that BMW Australia boss, Marc Werner, is pushing the German brand for a ute.

“Mark is working for this very hard, and my team is fighting for this very hard. My team made a phone cover to remind me what is the priority in my region – there is a [photo of a] pick-up on my phone cover, just to remember: when I talk to the board, these are my priorities.”

The issue seems to be that the medium-sized ute market is limited to countries such as Australia, Thailand, Malaysia, Brazil and South Africa, with North Americans preferring the larger utes and Europe having no love for the light utility whatsoever.

“In all honesty, there is no pick-up market in Europe. If you look at the VW Amarok, it has terrible sales and there are… we have many more segments to explore where there is also for the Australian customer, satisfying profitable business [before the ute].

“Priority for pickup, maybe it’s not number one because of the enormous challenges the whole motor industry has [for the moment]. There are, however, a lot of people at BMW that say ‘before I retire I would like to have a pick-up to take into retirement’… For Australia it is important, no question about that, I acknowledge that very clear.”

For now BMW remains committed to its core brand as well as its innovative i sub-brand that seeks to bring mainstream electrification to the luxury segment.

Would you like to see a ute from the Bavarian brand?

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