Can Kuhnt get BMW back on track?

With sales in decline and dealers clamoring for more balanced inventory, including more hot crossovers, BMW's new U.S. chief faces a big test: Can he get the brand growing again?

Dealers say they need fresher products, a better car-truck mix, competitive lease rates and a return to the days when BMW's "Ultimate Driving Machine" tag line resonated wholeheartedly with consumers. They're looking at Bernhard Kuhnt, CEO of BMW of North America as of March 1, for help.

Kuhnt (KOONT), 49, has a lot of work ahead.

"Bernhard has to take it to the next level and at a time when there's a lot of things happening — a lot of electromobility discussions going on, a lot of autonomous driving going on, a lot of tech being delivered or developed here," Ian Robertson, BMW AG board member in charge of global sales and marketing, said in April at the New York auto show. "He's going to be busy."

Some dealers and analysts say BMW and Kuhnt should look at how customer perception of the brand has changed. For example, in Kelley Blue Book studies and surveys, 29 percent of respondents say they will consider buying a BMW, higher than for any other luxury brand. But in new-vehicle shopping activity tracked by KBB, BMW trails Lexus, Mercedes-Benz and Audi, in that order.

"BMW has really lost their mojo," said Rebecca Lindland, senior analyst for KBB. "They have incredibly high consideration numbers."

But the brand isn't converting as many of those shoppers to buyers as it should, she said. "They're disappointing people," Lindland said. "People are looking and saying, 'There is supercompetitive product out there,' and choosing something else."

It has made for a tough couple of years for the brand and its dealers.

In 2016, as its U.S. volume tumbled 9.5 percent to 313,174 vehicles, the BMW brand lost the U.S. luxury sales crown it had held for four of the five prior years, falling to third behind Mercedes-Benz and Lexus. It was the biggest decline among luxury brands for the year — as BMW's incentives soared 26 percent, according to Autodata.

Even the brand's most recent sales title, in 2015, was marred by reports of BMW "punching" vehicles, a practice in which automakers ask dealers to self-register vehicles as loaners. Even though BMW finished No. 1 in reported sales among luxury brands in 2015, it came in No. 3 in U.S. vehicle registrations that year, behind Lexus and Mercedes.

Incentives have moderated in 2017, but BMW brand's U.S. sales are down 3.6 percent through the first five months. That said, BMW has worked to rein in its inventory problems. Punching has subsided though not gone away, several dealers said.

U.S. stock levels have gotten "a little too low," said Ludwig Willisch, head of BMW Group Region Americas and Kuhnt's predecessor as U.S. chief. His pending retirement drove the leadership change.

Willisch turns 61 in early July — he likened that to being a "fossil dinosaur" in BMW's world where senior executives typically retire around age 60. Willisch's departure date hasn't yet been announced.

Dealers who have spent time with Kuhnt since he took his U.S. role give him high marks: "open-minded," "down-to-earth," "knows how to politic and get things done" are typical descriptors. They especially like that he has been in their shoes on the retail side.

"He's run a dealership — that is very valuable from our perspective," said Mark Smith, co-owner of Principle Auto, which owns two BMW stores in Texas.

Smith, a member of the dealers' aftersales council, wants a better inventory balance. BMW is increasing its mix of crossovers, which represented 42.1 percent of sales in 2016.

That rose to 46.8 percent during the first five months. Dealers can't get enough X1 compact crossovers and are eagerly awaiting the redesigned X3 and the new X2 crossover coming early next year.

"It's mix and content," Smith said. "It's a difficult brand because the consumer can order it in so many different ways. That adds complexity you don't see in a Toyota or Lexus or a Cadillac for that matter. And they got very conservative last year, and they cut back on a lot of inventory. They probably cut it too short, and there's a shortage now. Trucks continue to grow, and they have to figure out that balance."

Analyst Dave Sullivan of AutoPacific agrees that the proliferating model lineup is a challenge for BMW dealers: "There are so many body styles, between GTs, coupes, sedans, crossovers, M versions — it's overwhelming for a consumer and can place a burden on dealers having to finance these vehicles sitting on their lots."

The brand's mix in the U.S. has been biased toward cars as the market here has moved rapidly to SUVs and crossovers, he said, but the X1, redesigned X3 and the upcoming X7 will help.

Improving dealer relations and historical bad blood is another challenge.

"Ludwig started us on a path to build great relationships with the dealers, and that hadn't always been part of their program," Smith said. "Bernhard has to take the baton and take the next step of the relay."

Burkhard Riering contributed to this report. ​