Willisch expects BMW to keep U.S. luxury sales crown
AUTOMOTIVE NEWS: How important is it for BMW to remain the top-selling luxury brand in the United States?
LUDWIG WILLISCH: If you won the Super Bowl once, would you say, "We will walk away, we don't care and we would rather play college football?"
BMW of North America CEO Ludwig Willisch expects BMW to remain No. 1 in U.S. luxury-vehicle sales this year. BMW claimed the title in 2011 for the first time, ending Lexus' 11-year run as the luxury leader.
Willisch, 55, said the launch of the redesigned 3 series, the U.S. introduction of the X1 small crossover and updates and new derivatives of other vehicles will drive sales this year.
The German executive has been in the job since Oct. 1. He began his career in the 1970s as a car salesman in Germany, selling Audis, Volkswagens and Porsches. He came to BMW in 1996 and ran the company-owned dealership in Dusseldorf, Germany. He has headed BMW sales subsidiaries in Sweden, Japan and Germany and later was in charge of sales for the 28 European markets outside Germany. Willisch also ran the M performance unit for two years.
He was interviewed last month by Staff Reporter Diana T. Kurylko.
Q: Will BMW surpass its 2011 sales total this year?
A: We have so many attractive new models coming and on top of that, our main volume driver, the new 3 series, will come with all-wheel drive this summer. This will help us a lot. We introduced the X1 at the New York auto show. We have much reason to be confident.
What have you learned about the U.S. market since you arrived?
I am surprised how competitive the market is. I have yet to see a more competitive marketplace.
How will you position the X1 in the United States?
We are the only ones that have an offer in that segment. We are playing a unique role. We will attract a lot of new customers. The whole concept is to have a premium car as a small sport activity vehicle.
What annual volume do you expect for the X1?
I am quite bullish about the car. We will be cautious in the beginning. We do not want to push it at all. I am optimistic that people will like it. The new X1 will be in dealer showrooms in late August. We have not negotiated the final number with Munich yet. I am optimistic because of the marketing success of the X1 in Canada.
Sales of the 1 series fell 33 percent last year and are still falling. Isn't that unusual with fuel prices rising?
It always played a small role in this country because we don't have a hatchback. The hatchback is usually the most important car. We [only] have the coupe and the cabrio and that limited sales right from the beginning. We are still running according to plan. The segment for a premium or luxury car of that size is very small.
During and since the recession, have premium customers begun downsizing, looking for discounts and demanding more fuel efficiency?
The attitude of the premium buyer has changed. He is looking more for authenticity and a better experience at the dealership. It is very interesting that price has not become the main reason for purchase. There are soft aspects that have become even more important.
How do you react as a manufacturer?
By having well-trained service and client advisers who explain the virtues of our product and what really makes a difference. For us, this drives sales. It is a question of how convincing the person that interacts with the customer is.
What is BMW's big product news this year?
The 3 series, no question about it. We are in the very early stages of the marketing launch. If you look back in history at all the cars we've sold -- roughly 2 million since BMW of North America was founded -- every second car was a 3 series. Things have changed a bit with our broadening model lineup; it is now every third car. Right now, we only have the new 3-series sedan but there is more to come -- the station wagon next year.
From a brand point of view, the 6-series Gran Coupe is also important. We'll have another offer in the upper premium level and because of its stunning looks it will help brand perception as well.
What advances have you made with the new 3 series?
We have again done very well with the design, the outside and the inside. If you look at the front of the car, the connection of the lights with the grille makes the car look broader and it has a better stance.
Inside, we have a very driver-oriented dashboard. The car feels as if it has been designed around you. It has more legroom than its predecessor and it is a roomier car even though it has not gained considerably in size or weight, which is always a very important thing. You have the typical dynamic BMW feel that no one has yet matched. Today, you not only talk about agility and dynamics, you talk about efficiency and we are best in segment with fuel economy. These are very clearly the facts and figures that argue for BMW and give us the edge.
Will you offer diesel engines on more models in the United States?
We will look at all the opportunities, including the 7 series, and wherever it makes sense we will do it in the next two years.
You will launch 3-series and 5-series hybrids in the United States. Will they compete with your diesel cars or will you attract a different buyer?
Both are BMW hybrids because they stand for sheer driving pleasure and they will be very dynamic, with 335 hp on tap, and electric drive and an "eco-promo" where you can see how your driving pattern is influencing your fuel savings. They will not only appeal to customers that are extremely environmentally conscious, but to those looking for driving performance that other cars will not be able to deliver.
How will BMW compete with the smaller Mercedes-Benz front-wheel-drive A/B cars coming to the United States next year?
We have announced that by 2015 we will have additional BMWs in the small-car segment.
Will having a car smaller than the 1 series tarnish BMW's brand identity?
No, it has to be a trustworthy and true BMW. We see from our research that Generation Y in particular is very fond of BMW. They ranked us as the most desired brand.
Is the i electric vehicle subbrand intended to deliver high sales volume or send the message that BMW cares about the environment?
It will show for the first time in history that premium and electric mobility can go hand in hand. We will be the company that will stand for an emotional driving experience and the first ones to prove that electromobility can give you as much driving joy as anything else that has BMW branding.
When do the vehicles arrive?
The i3 comes in the fall of 2013 and the i8 in the spring of 2014.
How will dealerships handle the i subbrand? Will you have separate selling areas?
Exactly that. We are realistic enough, even though we think we will set the pace in electromobility, that it will still be a relatively small volume relative to our overall sales volume. We will have a dedicated area where we will show the cars and we will have a client adviser specializing in electric vehicles.
Will all U.S. BMW dealers sell the i subbrand?
Yes. We will have certain standards. In general, every dealer who complies with the showroom and workshop standards will. It could be that a dealer somewhere in the Midwest says: "I don't really want to," and we won't force him to.
Will BMW update its dealership facility standards?
We are discussing this with our dealer forum and we do have a view that is closely linked to the international standards that BMW dealers have to fulfill all around the world. Our dealers have invested $3 billion over the last 10 years. We do have things to change. It has to be an individual plan, to look at every dealership and say "here are the things to change." We will do that as partners.
Will you do something as radical as the Mercedes-Benz Autohaus standard?
We do not need or want to.
When will you and your dealer forum announce details and a timetable?
By the end of the year.
Are BMW dealers the most profitable in the United States?
They are highly profitable and if you look at transfers and buy/sell of dealerships, buyers tend to pay the highest blue sky in the country. There is a lot of confidence about the BMW franchise in the future.
What are your goals as CEO?
We want to stay No. 1 in the premium segment. Midterm, we want to be at the top of customer satisfaction, and we also want to have a very fruitful and constructive relationship with our dealers.
You can reach Diana T. Kurylko at email@example.com. -- Follow Diana on