The fact that long-time competitor Daimler recently stepped up its game and snatched away the crown of most premium vehicles sold clearly doesn’t sit well with BMW. In an effort to reclaim that luxury sales crown, the Bavarian automaker is to launch 40 new cars by 2020.
40 Cars in three years is quite the target, and therefore it shouldn’t surprise you that there is quite some ‘creative counting’ involved. To make things clear, we are talking about 40 new cars from the BMW Group, which also owns the brands Rolls-Royce and Mini.
The large model offensive started with the recent introduction of the new BMW 5 Series (G30) and counts each model variant as a new car. Entirely new cars that are expected to debut before 2020 are the new X2 compact SUV, flagship X7 crossover and possibly the new Z5 roadster.
BMW Group CEO Harald Krüger: “We are launching the biggest model offensive ever. We have started a transformation unlike anything our company has seen before.” And BMW has plenty of reasons for such a transformation. For starters, profitability of the Bavarian automaker fell to a six-year low in 2016 and in terms of sales it fell behind Mercedes-Benz for the first time in over a decade.
Since Krüger took office at BMW in 2015, his focus has been set on revamping the company’s profitability. However, the company’s books show it’s dealing with a significant rise in costs. BMW spent €5.16 billion on R&D in 2016 alone and said it is planning on investing at an even higher rate over the next two years. BMW predicts that its profit and revenue slightly rises in 2017, while its automotive margin remains stable between 8 and 10 percent.
“Profitability is more important for us than the sales volume race,” said Chief Financial Officer Nicolas Peter. BMW’s global deliveries rose 5.2 percent to 2 million cars last year, less than half the 11 percent rate at Mercedes, which eased past its rival by selling 2.08 million vehicles.”
Beyond the model offensive BMW plans to enhance its offering at the very top of its model range. Even more luxurious vehicles and variants should complement its top-of-the-range 7 Series sedan and increase the brand’s strength in the luxury segment.