As 2005 came to a close, BMW of North America LLC was poised not only to outsell archrival Mercedes-Benz again but, for the second year running, become the top selling European brand in the United States, says CEO Tom Purves.
Purves has headed BMW in this country since 1999. Since then the company has nearly doubled in size and has launched the Mini brand. Last year, BMW replaced the 3 series. But there are plans for a larger replacement X5, two crossovers and a version of the smaller 1 series sedan for the United States.
Purves was interviewed in December at BMW's North American headquarters in Woodcliff Lake, N.J., by Staff Reporter Diana T. Kurylko.
Where will BMW end 2005? It appears you will beat Mercedes-Benz again and be the top European importer.
We're pretty well ahead of Mercedes-Benz. We will be a little bit ahead of (2004), so it will be another record year. It will be a small increase because this has been a year of big changeover for us. We introduced the 3 series. It's only the past two to three months that we have full availability and the full sales results.
What about your other new products?
(In 2005), we've had completely new engines in the 5 series, which was like a changeover/run-out for us. We had the new all-wheel drive in the 5 series and the 3 series. We had the introduction of the M5. There has been quite a lot going on in terms of model changeovers. We will finish the year in good shape.
Are you seeing more interest in cars now that the X5 is at the end of its life cycle?
The X5 is in its last period and it's selling incredibly well. It's not that people say, "I don't want an X5; I'll buy a 5 series." But our 5 series sales are substantially up, and (Mercedes-Benz) E-class sales are up. Cars in that 5-series shape and size are seeing a tremendous increase in sales.
Are your 3-series sales up partly because buyers are downsizing?
I'm not aware that people have been downsizing. You do get cycles. The 3 series competes in the segment of the market where there are competitors. At the moment, we have the new car on the block and other people have the older car.
Now that you phased out the 2.5-liter engine for the X3 and repositioned the pricing, how is it selling relative to the X5, considering the similar interior room?
There is no car that has won us more customers than the X3, and 55 percent are ladies -- which is a high percentage for us. What we've done is made a clearer differentiation. You have a 3.0-liter X3 with more than adequate performance and that gives the retailers a simpler order plan.
We acknowledge it's a new sector for us. We're not the greatest experts in that sector. It's like some of our competitors that have come into the 3-series sector and discover it's not so easy.
When will we see the new X5, and will it be substantially bigger?
Very soon. The reality is when you make a bigger truck, you can't make it handle like a BMW.
Are your customers in that segment asking for more interior room, and will you satisfy that?
We'll do as much as we can without trading off our values.
Any more word on when the 1 series is coming to the United States?
No more word. It is absolutely coming. The 1 series is a big hit in Europe. It always was planned that we would not have the hatchback and there is always a gestation period for other models. The fact that the currency has moved is less of an issue.
BMW is looking at two bigger interior room vehicles. Why do you want to get into the new roomy wagon segment?
We can't bring a big Range Rover-sized vehicle as a BMW. The reality is, the bigger you get, the more difficult it is in getting it to handle like a BMW. Our interest is in how the passenger and driver relate to each other in the car and how much space they have in the interior of the car and packaging that.
We need it because there is a very substantial migration of sedan-driving customers in Europe to more space-oriented vehicles, and SUVs are not exciting for those people.
Will those vehicles come to America?
Yes. No time frame.
You may e-mail Diana T. Kurylko at [email protected]