No More Niches: German Luxury Lineups Likely To Shrink, Not Expand
Choice is good for car buyers. But in the never-ending quest to produce incremental volume gains, the planet’s largest premium auto brands agree that certain niches are quickly becoming untenable.
Known for questioning in 2014 whether the global sports car market would ever recover from its post-recession collapse, BMW sales boss Ian Robertson told Car And Driver earlier this month that “some body styles will be removed in the future.”
Meanwhile, the head of Mercedes-Benz Dieter Zetsche said at the Geneva auto show that the lack of Chinese uptake for specialty cars “makes the business case for these vehicles less easy.”
Yet long before a model cull returns us to the days of tidy luxury lineups — 3 Series, 5 Series, 7 Series, and 8 Series as the 1990s intended! — premium German marques will first introduce a slew of new models. And the body styles destined for removal? Likely not the silly four-door coupes and impractical SUVs you love to hate.
The problem described by BMW and Mercedes-Benz does not relate to unrealistic expectations but rather to rapid changes in market trends. There was never a belief, for example, that niche-filling models — the Mercedes-Benz CLS-Class and BMW X6, for instance — would outsell their mainstream partners, such as the E-Class and X5. The goal at Mercedes-Benz and BMW was to spread development costs across multiple model lines by spinning off more costly nameplates from higher-volume platforms. In that regard, they’ve succeeded.
Nevertheless, the lineups are too large, filled with too many models that cost great sums to develop but fail to deliver in a market that’s quickly moved away from impractical, low-slung cars.
As a result, BMW says, body styles will be removed. Making a business case for niche models, Mercedes-Benz explains, is too difficult.
YOU DON’T KNOW THE HALF OF IT
Of course, many of the niches already filled by the German luxury trio aren’t filled in the United States. While Mercedes-Benz markets the CLA-Class sedan and GLA-Class crossover on this side of the Atlantic, the A-Class and B-Class hatchbacks along with the CLA-Class Shooting Brake remain elsewhere.
The BMW 2 Series we know well is linked to three-door and five-door 1 Series hatchbacks in other markets, while the 2 Series coupes and convertibles are joined by a Mini-related 2 Series Active Tourer mini-minivan.
And here you were confused about where the BMW 4 Series Gran Coupe fits into the time-space continuum? Puh-leeze. You ain’t seen nothin’.
Before body styles are removed, however, the business case has been made for additional model lines to fill narrow holes in the German luxury lineups.
On the way are vehicles such as the BMW X2, squeezed into the narrow gap between the X1 and X3, and the X7, a proper full-size BMW to take on the Mercedes-Benz GLS.
Mercedes-Benz’s recent AMG GT Concept shows how Mercedes-Benz will squeeze a performance sedan into a lineup already chock full of AMG E63, CLS63, S63, and S65 four-doors.
The result will be like an episode of 24. Perpetually, characters are being added one after the other after the other. Yet all the while, you know somebody’s about to die.
In the auto sphere, the vehicles likely to die are the coupes and roadsters we all say we want but which none of us seem to actually buy.
It hasn’t always been so. In calendar year 2005, for instance, Mercedes-Benz USA sold 41,105 copies of the CL, CLK, SL, SLK, and SLR McLaren. Those five two-doors combined to outsell Mercedes-Benz’s entire SUV range.
Times have changed. Today, Mercedes-Benz’s “light truck” division accounts for more than half of the brand’s U.S. volume, while two-door models produce less than one-in-ten Mercedes-Benz sales.
In a market that’s veering away from impractical cars towards more flexible utility vehicles, BMW and Mercedes-Benz aren’t going to sacrifice vehicles in their booming SUV divisions.
Instead, some impractical cars — the proper coupes and the convertibles — will die. Probably not in a 24-esque explosion of industrial park gunfire, but rather as a result of negligent homicide.
Cars won’t die completely. “We’ve done the Gran Coupes; they’ve really worked,” BMW’s Robertson says. “People like the lower seating position and the sporty dynamics but also the fact there’s a door in the back.”
At BMW, Gran Coupes are essentially coupes with four doors. Otherwise known as sedans.
BMW will replace the Z4, but Robertson — again pointing out that the roadster segment wasn’t restored following the economic collapse eight years ago — says BMW needs to work with Toyota “to try to gain some economies of scale.”
Indeed, the volumes are so low with such cars that the purpose of developing them relates purely to branding, not the bottom line. BMW isn’t really BMW if there’s no sports car in the range, so the company is forced to stick with the traditional program, at least to some degree. Doing so comes at a cost: money is made with high-volume SUVs, not low-volume two-door cars.
As for Mercedes-Benz, does there need to be C, E, and S-Class coupes plus SLC and SL roadsters plus AMG-specific sports cars? No.
But when a two-door dies, an SUV is born.
Timothy Cain is the founder of GoodCarBadCar.net, which obsesses over the free and frequent publication of U.S. and Canadian auto sales figures. Follow on Twitter @goodcarbadcar and on Facebook.
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