BMW Exec On Tesla’s Sale Ramp: It’s Putting Pressure On Segment

OCT 3 2018 BY MARK KANE 51

Tesla results do not go unnoticed.

Rapidly growing Tesla sales put pressure on the already tough U.S. premium/luxury segment, according to Bernhard Kuhnt, CEO of BMW North America.

“Tesla is now ramping up their volumes, and it’s putting pressure on that market segment. In that environment, I’m very, very pleased to say we were up.”

BMW barely increased sales in the U.S. last month, by just 1.3% year-over-year, although passenger car sales decreased 9.2%.

On the plug-in side, BMW sold some 1,858 BMW/MINI, which is just 4.3% more than a year ago, at a share of 6.7% of the automaker’s overall sales result. All this while Tesla sales shot up to amazing new heights.

As overall sales of other competitive brands shrink (Lexus down 6.1%, Mercedes-Benz down 9.8%), BMW can indeed be happy, but it doesn’t sound encouraging for the future.

Tesla and BMW are now working on two models – Tesla Model Y and BMW iX3 – that could be direct rivals in two years or so. Much depends on who will deliver the better car at a more reasonable price.

Source: theedgemarkets.com

Categories: BMW, Sales, Tesla

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51 Comments on "BMW Exec On Tesla’s Sale Ramp: It’s Putting Pressure On Segment"

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TomArt

HAHA! Boo-hoo! Go Tesla!!

TJKR

Message to BMW… just electrify the X3, X5 and X7. X3 with 75 kwh battery, X5 – 100 kwh, and X7 – 125 kwh. Also electrify your 5 series and your problems wiill be solved.

Rudi

you are right … BUT: the X2 could be the perfect EV car at this Moment if it would be an EV

Mad

Electrifying gas cars makes for crappy evs. Thats because the bodies are not designed around the battery.

Will

So right. They waiting for thier modular platform

Henry

Even the modular platform is a compromise.

MDEV

And from where they will get all the batteries ? That’s the problem, no way they can go beyond compliance.

Trackdaze

Bmw sold 1600 530Es in china alone for August. Tesla? about 280 model S.

Speculawyer

It’s not that easy. They’ll end up with kludge conversions that don’t get good range.

Name a single ICE conversion that has sold really well as a converted EV. There are none. They end up expensive, with poor specs (especially range), and missing critical features.

arne-nl

Hyundais and KIAs are such ‘common platform’ cars. They get rave reviews, have good range and their poor sales are only caused by lack of batteries, not by inferior technology.

Bloggin

If BMW wants’ to add volume, then offer the 3-Series EV. But dang, they need to update the styling because the NEW 2019 model looks so old school.

menorman

And in the meantime, chop $10k off the i3 MSRP.

Tedfredrick

Exactly. It’s not a bad car, it’s just way overpriced for its range and styling compared to the Model 3

WARREN

Amazing how well BMW is doing in it’s segment considering the 3 series is being replaced any time now….

https://g20.bimmerpost.com/forums/showthread.php?t=1541002

vvk

Man, that car is ugly!

Get Real

I posted this in another thread but it applies here too:
I have said it all along, Tesla with their products is the only American auto OEM to ever challenge and beat the Germans in the sport/luxury market.
As such, they are a serious threat to the German mid-high end auto manufactures and this is primarily why they are starting to (slowly) pivot to adopt (hopefully compelling) electrification. And yes I know diesel-gate also helped.
Now when Tesla enters the Model Y and gets out a pickup with obviously more factories they will likewise become a huge threat to the even more laggard, legacy Detroit “big 3”.
Disruption of a static, non-innovative industry at its finest.

Will

Look like a mini 7 series

Speculawyer

Yeah, when you get used to the smooth simple elegance of something like the Tesla Model 3, that busy front with all those drag inducing grille just looks weird.

But it’s polarizing…many are still so culturally familiar with the grid and think it looks good. To me, it just looks like a a machine that is so inefficient & klunky that it requires a massive radiator up front to bleed off waste heat.

REXisKing

Why are they going with front-end Dogs-Nose.
Is this some new trend?

I’ve been harping on BMW to take the threat seriously, at least now we can relax, they seem to get it.

Nix

People are buying up the last of the current gen ahead of the downgrade….. Especially manual transmission fans

Viking79

“In that environment, I’m very, very pleased to say we were up.”
Keep telling yourself that BMW, if it makes you feel better. Yes BMW was up, but not in the Model 3 segment. In September the 3 series was down 40%, the 2 series down 32% and the 4 series down 13%. The rest of the summer was the same. Yes, a new 3 series is coming, but expect lower sales volume BMW.

Andy

3 Series sales peaked in 2014 and have been declining ever since, so it’s no surprise that it’s down again this month. To counter that their X2/X3 sales are up at least as much as their sedan sales are down – hence the increase in sales.

People moving from sedans to crossovers, like most of the market. It’s why Tesla need to introduce their Model Y sooner rather than later. The 3 is unlikely to single handedly transform decline in the sedan market long term and will probably hemorrhage sales to the Y when it’s released like most other manufacturers.

Useful graph to show the point further. Total US sales, per year, of cars, SUV’s and Pickups.
comment image

“Peak car” was in 2008, and in every year since (except 2011) sales ( as a percentage) have declined. Correspondingly (again except 2011) SUV sales have increased, overtaking car sales in 2014. BMW show this same trend. The only one not doing so is the Model 3, in part probably because Tesla don’t make an equivalent SUV/CUV.

ffbj

The superiority of the Model 3 compared to anything out there is why it’s selling so well.
Yes there is a switch to SUV and CUV, but Tesla is bucking the trend.
The Model 3 will probably have demand for many years, as currently it would take then 2 years to meet the current backlog of orders.

Will

They not bucking the trend. These are reservations from 2 years ago, after that then what

rad

After that they open up to the 7 billion people worldwide that did not reserve.

Andy

?

The 400,00 reservations number is a worldwide, not just the US. A lot of people seem to get confused about this.

Robert Weekley

Most people never, ever, just ordered a car, suv, or pickup, in their life! It is only after a test drive that they choose a vehicle.

With only 100 Model 3’s officially available for test drives, most are friends giving friends rides, or letting them drive, that will tip some people over to a Tesla or a Model 3!

theflew

You can buy one now in the US without a reservation.

Speculawyer

Those reservations are refundable. People can walk away at any time.

Jason

Then all the rest of us who didn’t make a reservation start buying them.

magama52

I agree with you ffbj and Andy. With the Model3 bucking the trend and the possibility of the SUV fad winding down (remember the mini vans fad), Tesla could be in a much better position than others, ie FORD with their car line up. IMHO Ford is really taking a hell of a gamble right now and its starting to show.

Andy

They’ve stated they’re getting out of the ICE car business so they can concentrate that money on electrification. Presumably that means there may well be an EV car in the nearish future.

https://www.engadget.com/2018/07/09/ford-future-ev-interview/

Will

They got to wait until fall of next year to introduce the model Y or they would Cannibalize the model 3 sales

Robert Weekley

On the other hand, a Base range Model 3, Dual Motor, would be a great place holder, while waiting for a Model Y!

Speculawyer

We have had a long lull in gasoline prices. If gasoline prices keep rising, expect the SUV craze to slow down. We are notoriously short-sighted in our purchases.

Brian D

I’m pro EV and own one, so don’t take this the wrong way. Domestic gasoline consumption peaked a couple years ago and is now trending downwards. The improvements in fuel efficiency of ICE vehicles along with the uptick in EVs means Americans are buying less gas. That will only continue as more EVs hit the streets. Unless there is a major disruption to the system, gas prices are likely to stay flat for many years to come, as OPEC tries to keep gas affordable to dissuade people from switching to EVs.

Ron M

The US consumed 142 billion gallons of gasoline in 2016 a little more than in 2015. I haven’t seen any figures on how much was consumed in 2017 or YTD for 2018.

REXisKing

The BMW X2 and X3 suck as driving cars.
They’re good for European women, in their slender streets, but, on the highway, they don’t have a stable width, and a high center of gravity that is not confidence inspiring.

Better, if they brought over 4 wheel drive wagons, if you want a drivers car and extra capacity.
But wagons are rare.
Are SUV’s so much more profitable because they have fewer safety regulations?

Andy

Wagons are rare because nobody wants them. Most people that drive aren’t performance oriented and prefer a practical vehicle. With the additional height SUVs/CUV’s are generally considered more practical, especially when you consider the equivalent sedan is going to be a fair chunk longer.

SUV’s have the same safety regulations as cars, it’s commercial vehicles that usually have less. They’re more profitable because people are willing to pay more for them because they feel like they are getting more vehicle.

Some Guy

New 3-series was revealed at Paris auto-show these days. Tesla had a Model 3 in their booth a short distance away. According to reports on electrek, the Model 3 apparently attracted a larger crowd than the brand new bimmer. With a Model 3 that is available in the US for quite a while now. And that was on industry and press day, where the public has no access yet. I mean, industry and press should know by now what it looks like, right?

Anozie

Maybe they don’t. 😂😂😆😉

Will

3 % growth in the whole company is not bad compare to Americans autos which they are losing 10% in sales this year compare to last year

Vexar
BMW spent a lot of money designing their i3, it is not profitable to make it (and famously so, at least internally at BMW), and they would be terrified to even try to apply that formula to what makes them money. Electric vehicles mean significant change. They mean risk. Not everyone has the “bet the company” mindset Elon Musk continues to exhibit. I think that’s why BMW is reluctant. It’s not like VW Group, who got caught, fined, and punished, globally. They were forced to spend money on building a Supercharger-like program. May as well use that investment. Nobody is forcing BMW to do anything in particular, other than the specter of government sales ratio mandates and consumers wanting to drive in certain metro areas. I would love it if BMW somehow negotiated a contract or built a factory for battery supplies to handle 10,000 BEVs a month. Tesla started selling cars ten years ago, but most importantly, they started with nothing. No existing supplier contracts, no labor unions, no brand image, no reputation, no dealer network. It is fundamentally harder for an existing auto manufacturer to switch to an electric vehicle product line because a lot more people need… Read more »
Leo B

BMW recently announced a 4 billion euro deal with CATL for the supply of batteries, 1.5 billion for the European market and 2.5 billion for the Chinese. Numbers may change now the European Parliament has pushed for much more restrictive emission regulations. CATL also has a deal with Mercedes and VW and is planning to build a battery factory in Erfurt, Germany, to be operational in 2021.

Vexar

OK, I clearly missed that. The principle still applies to other manufacturers. Is it “as much as you can make” or limited to… say 30,000 units a year?

P Roppo

Interestingly this morning, Automotive News ran an article titled “Mercedes Leads Luxury Race”. It went on to detail the tight battle between the German 3 in the US while failing to mention the elephant in the room – Tesla. Not once.

I wrote a comment about that and now that the BMW quote is out, that article has apparently disappeared.

Tony Marco

I hope Tesla sells a boatload of Model 3s (not sure how long they can sustain their current rate), but it’s the Model Y (SUV/CUV) that will really fly !

Until they can get that one out, legacy automakers can take their time ramping up.

Maybe BMW will get their i3x out soon !

Speculawyer

Maybe not. The Model Y will have more frontal area and thus more drag. Thus, the Model Y may have a smaller range and/or more expensive price. Many will go with the Model Y…but I wouldn’t be surprised if the Model 3 sales remain larger. The Model S sales have been larger than Model X sales until the Model 3 became available in large quantities.

Robert Weekley

If Model Y is unveiled on March 15th, 2019, as suggested, and offers a specified Towing Capacity, before they state an approved Towing Capacity for Model 3, that may Sink Extra European Demand for the Model 3. I was hoping, that by the time they announce European Spec Model 3’s, A Certified Towing Capacity of at least 2,000 Pounds, to maybe 2,500 Pounds would be announced!

Anozie

Judging by Tesla’s history, the legacy automakers had better get their acts together and launch compelling SUVs/CUVs as soon as possible. If the launch and ramp of Model 3 is anything to go by, Tesla will launch and ramp Model Y much faster than anyone thinks. There’ll be delays, certainly, with a healthy dose of “Elon time”, but in the grand scheme of things, Model Y will come to market much faster than the industry expects

Speculawyer

Well, admitting that there is a problem is the first step, so that is good.

But BMW needs to create some competitive EVs if they want to thrive in that space. Not just the strange 3-cylinder PHEV supercar and the polarizing i3 weirdmobile.