The Sunday Mail
BAYERISCHE Motoren Werke AG (BMW) failed to match the pace of sales growth at Audi and Mercedes-Benz in the third quarter, as the world’s biggest maker of luxury vehicles battles to defend its lead.
BMW’s auto deliveries rose 5,8 percent to 509 669 vehicles, including Mini and Rolls-Royce models.
Daimler AG’s Mercedes sales, including the Smart brand, rose 9 percent to 431 000 vehicles on new models like the GLA compact sport-utility vehicle, while Volkswagen AG’s Audi, which expanded with the A3 sedan, delivered 429 925 cars, 7,2 percent more than a year ago.
BMW has added models like the 4-Series coupe and the van-like 2-Series Active Tourer to thwart plans by Audi and Mercedes to take the No. 1 spot in luxury cars by the end of the decade.
That lead may become tougher to defend as Audi pushes ahead with a programme to invest 22 billion euros ($27,5 billion) by 2018 and Mercedes expands with vehicles like the upcoming M-Class coupe.
BMW Tuesday tempered its car sales outlook for the year.
“We won’t boost sales at any price,” Chief Financial Officer Friedrich Eichiner said on a conference call with journalists.
BMW now expects “solid” sales growth, which translates to mid-to high single-digit gains, instead of “significant” double-digit increases in sales, as it focuses on maintaining profitability, Eichiner said.
BMW shares fell as much as 2,8 percent, the most since October 16.
“Next year, I expect a slight tendency for BMW to lose market share as some models are a little older,” said Juergen Pieper, a Frankfurt-based analyst with Bankhaus Metzler.
Profit Gains
Earnings before interest and taxes in the third quarter rose 17 percent to a record for the period of 2,26 billion euros.
Vehicle production exceeded deliveries by about 36 200 vehicles in the period as the company ramped up new models like the five-door Mini hatchback and X6 SUV.
“The numbers were supported by a degree of overproduction in the quarter, which would have flattered earnings to a certain degree,” said Stuart Pearson, a London-based analyst with Exane BNP Paribas.
BMW’s earnings capped a positive quarter for carmakers in Europe, where demand is recovering from a two-decade low reached last year.
Audi helped Volkswagen increase operating profit 16 percent to 3,23 billion euros. PSA Peugeot Citroen (UG), the region’s second-biggest carmaker, said it expects to reach a goal of generating positive cash flow two years earlier than anticipated. Revenue at Renault SA (RNO), the No. 3 in Europe, rose 6,7 percent to 8,53 billion euros on budget Dacia cars.
Compact SUV
Buoyed by demand for the full-size X5 and new coupe-like X4 SUVs, BMW’s automotive profitability beat its two closest rivals.
The auto unit, which also makes Mini and Rolls-Royce cars, generated Ebit equivalent to 9,4 percent of sales, improving from a margin of 9 percent a year earlier. That beat the 9,2 percent return on sales at Audi, while Mercedes reported a two-year high profit margin of 8,5 percent.
The company is considering another compact SUV model and plans to double the number of models produced in China to six, Chief Executive Officer Norbert Reithofer said on the conference call.
BMW agreed in June to lengthen a vehicle production partnership with Brilliance China Automotive Holdings Ltd. by 10 years, extending it to 2028.
The company expects sales in China, its single biggest market, to climb in the low double-digits next From page B3
year, Reithofer said. BMW car sales rose 8,4 percent in China in the third quarter, which held back the total increase in the first nine months of the year to 18 percent.
BMW stuck to its forecast for a “significant” increase in 2014 pretax profit from last year’s 7,9 billion euros.
BMW plans to deliver a record of more than 2 million vehicles this year, even as Mini demand takes a hit as the brand changes over to a new version of its basic three-door hatchback model. — Bloomberg
Bouncer get more finesse
WHEN BMW first launched the X6 many people, myself included, wondered what the point of it was.
Who needed a coupé SUV or, as BMW termed it, a sports activity coupé (SAC)? It had terrible boot space, limited rear seat space and lacked all the practicality of the X5.
Then they started appearing in the night, leaving nightclubs at closing time. Kitted with big bling wheels and wearing a matte black wrap, the X6 became the symbol of the night, the bouncer of the SUV market.
It had attitude and many people wanted one to match their personality, or at least give the impression that they reflected the attitude of the car.
No-one admitted to it, though. I have a friend who asked me to guess what car she had bought. A Range Rover, I answered. No. Then like a discreet drug dealer in an alley, she lowered her voice and whispered: “A BMW X6.”
That was the thing about the first generation of the X6. It had no practicality, you could barely see out of the rear window and it had more blind spots than an armoured personnel vehicle. But it was unique and it had attitude. It was a cool take on the SUV genre and unless you had 2,4 kids and a dog, the lack of practicality could be ignored.
It was also dynamic. I went to the original launch in Spartanburg, South Carolina in the US and threw it around a proving ground where its ability appeared to defy the laws of physics.
So it was that I found myself back in Spartanburg for the launch of the second generation. At this point I could make this article very short. After conversations with a few experts from BMW at the launch I asked the question: “So it’s an X5 coupé then?” German engineers hate it when you see through the marketing hype. They look at the floor as though they have strict instructions and then the answer came: “Ja”.
So there you have it, the new X6 is the X5 coupé. This is not surprising given the company has renamed the 3 Series coupé as the 4 Series.
Being a five-door though, the X6 should have been called a X5 Gran Coupé to match the naming conventions of other models. There are some differences, although less than with the original generation. Now the front looks even more X5 and the side profile has lost the sharp rake of the coupé line in the original.
This has been done to improve boot space and rear headroom, although I still found my head touching the roof in the rear seats. The boot space still looks the same as that in a sedan and because of the coupé line tailgate you cannot stack to the roof practically unless you have something triangular shaped like a giant wedge of cheese.
The rear window is larger to improve visibility and you get new tail lights and obviously a different rear to that in the X5.
Inside you get, well, an X5 really. You do get the option of a digital dashboard which changes themes depending on which mode you are driving in between eco pro, comfort, sport and sport+.
The new X6 might lack some of the attitude of the original, but the flip side is that it is now a little more grown up. It is like the bouncer who went to Harvard to get a degree in management sciences. It has a more refined look, but it is more executive than before. It is still not for the family exec though; if that is you then stick with the X5, the Range Rover Sport or the Porsche Cayenne. There is one major characteristic it has retained. Peter Wolf, senior vice-president of product lines and grand series at BMW AG, said the new model is “the sportiest member of the X family”. And he is right, although both an X5M and X6M are on their way.
The chassis has been tuned to be more dynamic than the X5 and it has an upgraded version of the X5’s eight-speed gearbox that will be rolled out to other models soon. There also various packages available which will include items such as a Dynamic adaptive suspension package, a Comfort adaptive suspension package and a Professional adaptive suspension package. The drive through North and South Carolina included some twisty mountain passes but, conscious of the possibility of a patrol car hiding round the next corner, it was mostly done at the mandatory 55mph speed limit so no sign of the dynamic nature there.
Then we hit the proving ground.
Including a skid pan, slalom course and handling track, the X6 was chucked around like a race car and did not falter once. I spent my time in the M50d which with its 280kW and 740Nm provided immediate response and a fair dose of over-steer and under-steer, particularly in Sport+ mode.
It is always a thrill to throw a big SUV around a racetrack and going right back to the original X5, these models have always been at their best in this environment.
Pricing
The new X6 will arrive in SA in February 2015 and there is one final issue, the price. It might be more X5 coupé than before but it will carry a price premium over its X5 sibling. Indicative pricing will see the range start at R955 503 for the x Drive 35i, to R1 332 540 for the x Drive M50d. — Business Day SA
