BMW fires a 40-model salvo in the fight against Mercedes-Benz

By Bloomberg News, April 10 2017
BMW fires a 40-model salvo in the fight against Mercedes-Benz

BMW plans the biggest rollout of new and revamped models in its history as the luxury-car maker fights back after losing the global sales crown to Mercedes-Benz.

Over the next two years, the Munich-based manufacturer will unveil 40 vehicles, including the new X2 compact sport utility vehicle and full-sized X7.

The rollout is part of plans to invest more  than €10 billion (A$14bn) in developing new models and technology for the transition to an era of electric-powered robo-taxis.

"We are launching the biggest model offensive ever," Chief Executive Officer Harald Krueger said at BMW’s annual press conference. "We have started a transformation unlike anything our company has seen before."

The combative tone marks a turnaround for Krueger, who took charge in 2015 and is now under pressure to revitalize growth after profitability fell to a six-year low in 2016 and sales slipped behind Mercedes for the first time in more than a decade. Still, the announcement may be more style than substance.

“‘Biggest model push ever’ is a bit of a rich term,” said Stuart Pearson, a London-based analyst at Exane BNP Paribas. While BMW will introduce a couple of new SUVs, “generally it’s more about updating the cars they’ve already got.”

The maker of BMW, Mini and Rolls-Royce vehicles is looking for a spark after the revamped 7-Series sedan failed to challenge the Mercedes S-Class and a redesign of the 5-Series was cautious.

Krueger has generally taken a low-key approach, focusing on profitability instead of sales. The goal is to generate resources for a costly shift to an era of self-driving, electric vehicles. The company plans to release the autonomous, battery-powered iNext in 2021.

BMW's €10 billion spending plan over the next two years compares with an investment budget in that period of about €16.2 billion by Mercedes parent Daimler.

The Stuttgart-based rival charged ahead of BMW in deliveries last year by filling gaps in its model portfolio. Mercedes is in the midst of an eight-year push to bring out 13 all-new autos by 2021, including the GLA and GLC SUVs that have already reached showrooms.

Beyond the 40 new models, BMW plans to boost its offering of lucrative, luxury vehicles to complement the top-of-the-line 7-Series. The goal is to challenge Mercedes and make BMW "the strongest brand in this segment," Krueger said.