BMW Australia managing director Marc-Heinrich Werner believes that sales of premium vehicles will continue to grow at a rate that outpaces the rest of the market.
However, he also believes his brand must retain balance and avoid moving too far downmarket. This would happen by focusing too heavily on the growth areas at the lower ‘conquest’ end of its range, embodied by the likes of the 1 Series and 2 Series Active Tourer.
Speaking this week at the launch of the new X5 M and X6 M, Werner — who has been in the job for about eight months — commented on the continued market shift towards premium brands such as his own, as well as rivals such as Mercedes-Benz and Audi.
BMW sales grew 11 per cent last year, and are up a further 14 per cent over the first quarter of this year to 5854 units. This is more than triple the overall market growth, though the growth rate trails that of Audi (up 15 per cent) and a the rampant Mercedes-Benz (up 24 per cent).
Werner, in fact, predicts that almost 10 per cent of the total market by the end of 2015 — expected to be somewhere between 1.15 and 1.2 million total based on growth figures — will comprise sales of premium brands.
"The premium segment — we’ve [the whole market, not just BMW] finished last year with roughly 87-88000 sales, and my personal predication is that this year will see 100,000 premium vehicles on Australian roads, and this will certainly put the Australian premium market into a different category when you compare it to other markets,” he said.
As we have discussed before, much of this recent increased market share is coming from ‘conquest’ cars — premium-branded models priced ever-closer to flagship versions of a ‘mainstream’ car. So, a BMW X1s Drive 20i that is priced close to a Mazda CX-5 Akera, or a BMW 118i priced close to a Mazda 3 SP25 Astina.
The context in which we discussed premium sales with Werner was a conversation about the updated 1 Series hatch, due in July this year, and which the company hopes can catch up to bigger-selling rivals such as the Audi A3 and Mercedes-Benz A-Class — both of which has easily doubled it sales YTD.
“I don’t want to speculate about volume, what is more important for us is that we actually work on both bookends,” Werner told us.
“We don’t want to become a small-car premium company with volume share in that particular segment of more than 50 per cent,” he said.
“For us it’s more important that while exploiting the market potential on the small-car segment, we want to balance that with opportunities on the other scale — X5s, X6s, 5 Series etc etc.
“That is for us a more sustainable approach than shifting the entire mix into small cars and become a small-car premium manufacturer.
“At the end of the day the consumer decides. I would not say that it is up to us to work against this kind of market trend however we do believe that in a growing premium segment — growing across the board — that it is really up the the manufacturer to exploit and work all these channels.”
Werner needn’t worry too much, given the X5 is the company’s top-seller YTD with 1098 sales, while the 3 Series, 4 Series and X3 all outsell the 1 Series regularly too.
By sheer coincidence, BMW AG today released its March sales figures for the entire globe today. It registered a record 195,593 units, with a further 36,635 Minis. Australia, then, makes up about 1.2 per cent of BMW's worldwide sales.