By Chris Reiter - Oct 14, 2011 9:00 PM GMT+0700
Enlarge image
The updated 3-Series, which was originally introduced in 1975, will be 9.3 centimeters larger than its predecessor and be available in Sport, seen here, Modern and Luxury packages to increase customization options.. Source: BMW AG via Bloomberg
Oct. 14 (Bloomberg) -- Adrian van Hooydonk, chief designer at Bayerische Motoren Werke AG, talks about the company's revamped 3-Series sedan. The sixth generation of BMW's best-selling model debuted today and will hit showrooms on February 11. Van Hooydonk speaks with Bloomberg's Chris Reiter in Munich. (Source: Bloomberg)
The updated 3-Series will be available in Sport, Modern and Luxury packages, seen here, to increase customization options. Source: BMW AG via Bloomberg
The renewed 3-Series, BMW’s entry-level sedan, will adopt parts and technology from the 1-Series and full-size 5-Series to lower production and development costs. Photographer: Guenter Schiffmann/Bloomberg
Bayerische Motoren Werke AG is rolling out a revamped version of the 3-Series sedan as rival models such as the Audi A4 age, thwarting efforts by the Volkswagen AG unit to grab the luxury-car lead. Photographer: Guenter Schiffmann/Bloomberg
Bayerische Motoren Werke AG (BMW) is rolling out a revamped 3-Series sedan to widen the automaker’s luxury sales lead over Volkswagen AG (VOW)’s Audi and its aging A4.
The sixth generation of BMW’s best-selling model, which debuted today in Munich, will hit showrooms February 11, about two years before Audi overhauls the $32,500 A4. That head start may help BMW’s lead over Audi surge 43 percent in 2012, according to an IHS Automotive forecast.
Backed by the overhauled 3-Series and recently revamped 1- Series compact, which together accounted for 49 percent of BMW’s sales last year, “2012 will be the sweet spot for BMW,” said Stefan Bauknecht, a DWS Investment fund manager in Frankfurt. “The 3-Series renewal improves sales volumes and pricing power, creating an immense margin advantage.”
The renewed 3-Series, BMW’s entry-level sedan, will adopt parts and technology from the 1-Series and full-size 5-Series to lower production and development costs. Higher profit from the car may help the manufacturer weather a looming economic slowdown. European Central Bank President Jean-Claude Trichet said this week that the region’s debt crisis has reached “a systemic dimension,” while China warned of “severe challenges” to the global economy.
Profit ‘Apex’
“The model cycle is arguably more important for upscale carmakers than the economic cycle,” said Juergen Meyer, who manages about 700 million euros ($960 million) for SEB Asset Management in Frankfurt. BMW’s profitability lead “could reach its apex in 2012 on the 3-Series.”
BMW’s auto unit reported earnings before interest and taxes equivalent to 14.4 percent of sales in the second quarter, outpacing 11.8 percent at Audi and 10.7 percent at Daimler AG (DAI)’s Mercedes-Benz. The Munich-based manufacturer has been the second-best performer in the Euro Stoxx autos and parts index over the past three months after tiremaker Pirelli & C. SpA, falling 22 percent compared with VW’s 24 percent drop and Daimler’s 29 percent slump.
The updated 3-Series, which was originally introduced in 1975, will be 9.3 centimeters (3.7 inches) larger than its predecessor and be available in Sport, Modern and Luxury packages to increase customization options. It will also be available with a head-up display, which projects speed limit and other data onto the windshield, and collision-warning systems. The 320d version, which can get as much as 57 miles per gallon, will start at 35,350 euros, 1,050 euros more than the current version. A hybrid will be available in the fall 2012.
Nabbing Customers
The larger size and new customization options could help BMW win over customers from other manufacturers, according to Werner Entenmann, head of Autohaus Entenmann in Esslingen near Stuttgart.
“The new 3-Series has potential to capture customers” from the likes of Mercedes, Audi, Ford Motor Co. (F) and General Motors Co. (GM)’s Opel, said Entenmann, who counts on the model to generate more than 35 percent of his dealership’s sales of about 1,400 BMW cars a year. He plans to hold an event for 4,000 customers when the model goes on sale Feb. 11. “It’s decisive for us,” he said.
Sales of the 3-Series are projected to jump 22 percent to 448,600 cars next year, boosting the BMW brand’s deliveries 9.3 percent to 1.47 million, according to IHS. Audi, which aims to grab the number-one position by 2015, will likely see the gap to BMW widen to 139,700 autos from 97,400 in 2011.
Automotive Challenges
Mercedes, which likewise covets the luxury-car crown, may get closer to BMW, buoyed by a new line of compacts. IHS forecasts Mercedes trailing BMW by 108,700 vehicles in 2012, closer than the 110,500 this year.
“Renewing the 3-Series is like renewing the company,” said Christoph Stuermer, an IHS analyst in Frankfurt. “The 3- Series has to be BMW’s response to the automotive challenges of the next decade,” and therefore needs to address the demand for cleaner vehicles, while generating the profit needed to pay for further development.
BMW is investing more than 1 billion euros in German factories in Munich and Regensburg, and at a plant in Rosslyn, South Africa, to produce the model. BMW has sold more than 12 million of the vehicle since its introduction.
“The new BMW 3-Series has excellent prospects for expanding its leading global market position,” Chief Executive Officer Norbert Reithofer said today.
Rivals Respond
Mercedes and Audi aren’t sitting still. Audi plans to roll out a face-lifted version of the current A4, which was introduced in 2007, in the first half of 2012 with cleaner engines and other improvements, said Moritz Drechsel, a spokesman for the Ingolstadt, Germany-based carmaker.
Mercedes upgraded the C-Class in 2011 with new engines and a restyled front end and interior. Next year, the Stuttgart, Germany-based carmaker plans to show the CLC four-door coupe, which will include high-performance AMG versions, to target sportier 3-Series customers, said a person familiar with the matter, who declined to be identified discussing internal planning. The next-generation C-Class is due in 2014.
Those responses may not be enough to overcome BMW’s early start. IHS predicts the manufacturer will further expand its lead in 2015 to 219,100 vehicles over Audi and 141,500 over Mercedes.
“They have two to three years where they can absolutely nail it,” said Arndt Ellinghorst, a London-based analyst with Credit Suisse who has an “outperform” rating on BMW stock.
To contact the reporter on this story: Chris Reiter in Berlin at creiter2@bloomberg.net
To contact the editor responsible for this story: Chad Thomas at cthomas16@bloomberg.net
Posts
No comments:
Post a Comment