I present this article for comments from the back room, persoanlly i think BMW's growth is down to an expansion of the brand, 1 series, x3 etc , but i think in the long run they will dilute the quality of the brand my mving into ford focus teritory, also I will be interested to know how they expect to maintain quality control know that they are a volume manufacturer. If I was Mercedes I would emphasise qulaity and exclusivity, and would start by offering an enhanced warranty and aftersales service, perhaps 5 year unlimited mileage warranty as a start warranty along with a service contract as standard with every new car sold.
BMW sales overtake Mercedes
By James Mackintosh in London
Published: July 7 2004 20:58 | Last Updated: July 7 2004 20:58
BMW has taken pole position in the luxury car market for the first time in seven years, beating German rival Mercedes in global sales for the first six months of 2004.BMW, owner of Mini and Rolls-Royce, outsold the Mercedes Car Group, which includes the Smart and Maybach marques, by 6,183 cars in the first half.
The BMW brand also outsold Mercedes-Benz badged cars in May and June, although the Mercedes brand stayed ahead in the six-month period.
BMW's success in snatching the sales lead reflects an aggressive programme of new model development that has seen the Munich company fill in gaps in its model line-up, including the recent X3 small offroader and 6-Series coupé.
It comes as Mercedes, part of DaimlerChrysler, tries to persuade unions to accept wage cuts in order to reach BMW's higher level of profitability.Daimler is also searching for a new head for Mercedes after workers' representatives forced the ejection of Wolfgang Bernhard, an efficiency specialist from Chrysler, shortly before he was due to start the job.
"There is a question about whether or not Mercedes can actually close the gap with BMW in terms of return," said Keith Hayes, motor industry analyst at Goldman Sachs.In the six months to June, BMW group sales rose 8.5 per cent to 590,983 cars, while Mercedes group saw a decline of 3.3 per cent to 584,800.BMW said profits were more important to it than its sales ranking.
But Mercedes said: "We want to be the No1 premium brand on a long-term perspective. It will be completely different next year and we will have increases again." Mercedes predicts a recovery later this year as the redesigned A-Class and new Smart four-seater rekindle the interest of drivers, and expects sales to be about 50,000 higher than last year's 1.3m.Michael Ganal, director of sales and marketing at BMW, forecast "significant" growth for the rest of the year.
"With the 1 Series [small car] we will make a powerful entry into the compact class as of September with a clearly profiled premium offer," he said.
JD Power-LMC, the market analyst, predicts that Mercedes will take back the top slot in the full year and increase its lead next year when more models are updated.
It forecasts a 17 per cent jump in Mercedes Car Group sales next year to 1.56m, more than a quarter higher than BMW's expected 1.22m.
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>>"If I was Mercedes I would emphasise qulaity and exclusivity, and would start by offering an enhanced warranty and aftersales service, perhaps 5 year unlimited mileage warranty as a start"
Obviously you are not aware of the well doucumented and perceptible decline in M-B's high standards of reliability and the rising incidents of minor and major niggles with its vehicles.
I've a pal who gets a new S-Class every two years and he's well aware of the increasing, never mind annoying, need to make warranty claims that would have been unknown some years ago.
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of ocourse I am I purchased a three series BMW for the first and last time and it has had its fair share of warranty claims...crap in my opinion ...I will buy Japanese next time..
Rgds. KAL
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As some of you will know, I do periodically work for German auto companies as a consultant. In fact I shall be jetting off to the Fatherland on Monday morning.
Anyhow, there is little doubt that BMW's increased sales are due to its expansion into other market sectors. Not many people seem to want 'regular' cars these days (i.e. Mondeo's Vectra's) car have become 'lifestyle statements' (load of marketing BS IMHO) and BMW have been able to capitalise on this with X5, X3, Mini (this latter being a superb example of spin over substance). Also Mini is cheap to produce so margins are high.
Access to technology in the auto industry is now ubiquitous - the same CAD package and lean manufacturing techniques are being used by everyone from Mercedes to Proton. Everybody buys in the same consultants (Ricardo, Porsche) so it is harder and harder for the 'prestige' manufacturers to maintain 'clear blue water' between their products and the the allegedly 'mass market' products.
Moreover, the German companies have become more 'Anglo-Saxon' (under pressure from US-trained MBA's) and are demanding higher returns on their sales. I have heard it said in MB that until 1993 the company was run by engineers who set out to build the best cars that they could, and then they got the accountants to figure out how they could make a profit from them. From 1993 onwards the accounts decided on how much profit was needed and the engineers had to figure out how to make the car generate that profit.
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