BMW Aims Duo of New SUVs Squarely at Mercedes's U.S. Luxury Lead
German rivalry heats up with BMW introducing X2, X7 utilities.
(Bloomberg) -- BMW AG, smarting from losses to Mercedes-Benz in the U.S. luxury market for two years running, is padding its arsenal of sport utility vehicles in a push to regain the sales crown.
It has a long road ahead. Even though BMW sales rose 5 percent in January led by its 3 Series sedan, Mercedes has a healthy lead just one month into the new year.
The Daimler AG-owned brand first seized the U.S. luxury crown in 2016 by adding more crossovers like the compact GLA as low gas prices and rock-bottom interest rates fueled America’s SUV fever. BMW is now playing catch-up, with two new utility models and several refreshes planned for the U.S. market this year.
BMW showed off the diminutive X2 crossover at the Detroit auto show and will fill a hole at the other end of the SUV spectrum with the full-size X7 at the end of the year.
“The X2, other than just being a cool SUV, it’s also a brand-new vehicle, completely new segment, which we believe could have a lot of conquest,” Bernhard Kuhnt, chief executive officer of BMW’s North American operations, said in an interview at the Detroit show. “We were lagging behind in the mix.”
In 2017, the share of BMW’s sales from SUVs was in the low 40 percent range, while the luxury market was closer to 55 percent, said Kuhnt, who took over as CEO last year.
Even in a flat luxury market, BMW has room to grow because SUVs will continue to take share from passenger cars this year, said Jessica Caldwell, executive director of industry analysis at Edmunds.
“The X2 is a good addition to the portfolio,” she said. “These SUVs that are smaller are priced more friendly to the average consumer.”
Smaller luxury players again saw outsize growth last month on the backs of their SUV offerings. Volkswagen AG’s Audi saw sales rise 9.9 percent to 14,511 units, led by its Q5 and Q7 models.
Deliveries for Toyota Motor Corp.’s Lexus -- which lost its No. 2 spot to BMW last year by a mere 553 vehicles -- jumped 15 percent to 17,914, buoyed by the NX and RX crossovers.
--With assistance from Jamie Butters
To contact the reporter on this story: Gabrielle Coppola in New York at gcoppola@bloomberg.net.
To contact the editors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net, Anne Riley Moffat
©2018 Bloomberg L.P.