With the Navara-based Mercedes-Benz X-Class just around the corner, BMW's local boss said he was 'surprised' with the Mercedes-Benz announcement.

Speaking with CarAdvice at the recent 1 and 2 Series LCI launch, BMW Group Australia boss Marc Werner admitted the local arm was surprised with the announcement and the brand is watching the space closely.

"That's one of the biggest topics regarding product strategy, going forward. We were quite surprised to see Mercedes-Benz making that announcement. But, having said that, we are watching to see whether this is going to be successful or not. For us, at the moment, this isn't a priority for us moving forward," Werner said.

Above: a speculative rendering of how a more road-focused BMW ute could look.

While it's not a priority for BMW at the moment, Werner's comments follow somewhat more emphatic quotes from Hendrik von Kuenheim, senior vice president of the company’s Asia, Pacific and South Africa region, who described the Mercedes-Benz product as 'disappointing'.

“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.”

BMW Group Australia is focusing on the rollout and expansion of the X range of products, with the all-new BMW X3 launching locally in November.

Either way, a BMW ute hasn't been rolled out and the success of a Mercedes-Benz utility could force the German rival into action.

"Our priority at the moment is to expand our X product range with the X2 and X7 and maybe there's room for another car as well and to further grow our BMW i business," Werner said.

"That's where the priority is at the moment, and if there is a pick-up in the future, that's yet to be seen. But certainly not in the next few years," Werner said.

Would you like to see a BMW branded ute on the market in Australia?