BMW and Mercedes-Benz Expect an Even Split Between Crossovers and Cars
Mercedes-Benz and BMW have more in common than just a bitter rivalry and the Fatherland — they both feel the need to get more crossover vehicles into North America.
Despite being known largely for their rich heritage of premium sedans and coupes, Bavaria’s Motoren Werke and Daimler’s Three-Pointed Star want to see utility vehicles replacing more of the cars they ship to the United States.
Last year, crossovers and SUVs comprised 42 percent of BMW’s sales in North America — an almost ten percent increase from 2015. Mercedes-Benz also saw an increase in truck sales. Sport utility vehicles now account for 47 percent of its passenger vehicle volume. However, both companies are anticipating a balanced ratio right around the corner.
“In the part of the market that we’re in, obviously 50 percent would be a good place to be,” Ludwig Willisch, CEO of BMW of North America, told Automotive News. “Right now we are a little over 40, so that gives you a clear indication where we need to be in the future.”
Last year was the X3’s best year on record, with 49,613 units sold in North America, but it would have been better had the SUV been more readily available.
“The X3 in this generation has been supply-constrained,” said BMW’s sales and marketing chief Ian Robertson. “We are expanding capacity quite dramatically. So we’re localizing that car in China, we’re localizing it in South Africa, as well as increasing our capacity in Spartanburg for it. I think we’re going to see a good lift out of that.”
BMW is also adding capacity at its Spartanburg plant in South Carolina to produce the incoming X7 giga crossover. Even the not-so-popular X6 crossover has enjoyed steady sales since the rise in CUV popularity.
Mercedes-Benz says it also plans to increase its utility vehicle output this year. GLS-Class sales have grown for the last three years and the GLE turned out to be even more popular than when it carried the M-Class name. That said, Benz plans to proceed cautiously while it gently shifts its production focus.
“On the one hand, it’s always terrible if you lose sales because you don’t have enough inventory,” Dietmar Exler, CEO of Mercedes-Benz USA, told Auto News. “On the other hand, if your product is in that much demand — you want it to be in demand. Ideally with some of the niche cars, you want to have one less than the market demand. But not hundreds less. Just one less.”
[Image: BMW Group]
A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.
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I'm surprised BMW doesn't yet have an X7 SUV, to slot above the X5 and X6 size-wise. The X5 isn't a serious three-row SUV, and the third row isn't standard, anyway.
Hey, the bigger, the better, I say. Don't worry about efficiency; we'll be drowning in cheap Russian crude before you know it.