BMW X5 responds to Mercedes-Benz ML threat

The German luxury car arch-rivals are squaring up in the large luxury SUV segment after Mercedes shaved several thousand dollars from the starting price of its new-generation ML (pictured below).

The entry-level version of the Mercedes-Benz ML, which has its official media launch tomorrow, starts at $81,400 – a price that undercuts the BMW X5 by more than $10,000.

BMW Australia has responded with a retail campaign that adds an Innovations package as standard across the X5 range that starts from $92,100. The company has confirmed to CarAdvice that the package will remain standard after the campaign.

The Innovations package costs $9000 for the base X5 xDrive30d, though BMW says the features included are worth about $16,000. They include electronically controlled tailgate opening/closing, bi-xenon headlights, front seats with electric memory adjustment, graphic head-up display, high beam assist and rear-view camera with Top View, a feature that gives the driver a bird's-eye view of the vehicle’s surroundings.

The Innovations package was previously an $8000 option for other X5 models.

The BMW X5 xDrive35i and xDrive40d Sport models, priced from $103,900 and $113,300 respectively, now include auto tailgate operation, bi-xenon headlights, head-up display, high-beam assist, ‘Comfort access’ system and a glass panoramic roof as standard.

The features would cost a total of $12,820 if bought separately.

The BMW X5 xDrive50i Sport, priced from $134,000, now features an alarm system, auto tailgate operation, head-up display, ‘Comfort access’ and metallic paint. As individual options, they would cost $9550.

The BMW X5 is currently the best-selling vehicle in the large luxury SUV segment, with 798 sales so far in 2012 accounting for a 16.7 per cent segment share.

Mercedes-Benz has achieved a 7.1 per cent segment share (340 sales) with the outgoing M-Class.

BMW’s closest challenger in the segment to April 2012 is currently Land Rover, with the Discovery (700 sales; 14.6 per cent share).

BMW has an advantage over Mercedes-Benz, however, with more SUV options for buyers, including the more affordable mid-size X3 and compact X1. Mercedes-Benz won't have direct rivals for these two vehicles for another couple of years.

The large luxury SUV segment remains stagnant with a year-on-year dip of 0.5 per cent, however, compared to other SUV categories.

Year-to-date figures for April 2012 show small SUVs have grown by 57 per cent, while mid-sized SUVs are up by 49 per cent and large SUVs are up 23 per cent.

CarAdvice will bring full details and a review of the new Mercedes-Benz ML early next week.