The
Bright Future for BMW
September
11, 2013 - Bayerische Motoren Werke AG (BMW) will launch a new version of its
X5 that is equipped with advanced technology in November 2013. It is a sport
utility vehicle (SUV) known as “The Boss”. The sporting functions of “The Boss”
features night vision to better detect people and animals and autonomous
driving in traffic jam. According to IHS automotive, it anticipates that “The
Boss” will be lighter and has better gas mileage than its predecessor which has
a higher chance to surpass the Mercedes-Benz M-Class (Maier 2013).
Besides that, BMW has sold 1.05
million cars worldwide in 2013. The sales figure of BMW is 21,100 units more
than Audi and 132,000 units more than Mercedes (Maier 2013). However, Mercedes
targets the luxurious SUV market with the new GLA compact while Audi will
restore its full size Q7 SUV to defend their market place. With its trimmed
X5’s weight by as much as 90 kilograms, BMW is able to compete with Mercedes
and Audi in reducing fuel consumption by about 38 miles per gallon (MPG) versus
that of M-Class, which is 35 MPG for the M-Class.
Moreover, BMW aims to put a plug-in
hybrid X5 together in 2015 and broaden its lineup with new models such as the
4-series coupe, the X4 SUV, the i8 plug-in hybrid sportster and the i3 electric
city car (Maier 2013). Last but not least, BMW allowed its attendees to
experience the i3 on a 300-meter track that snakes up and down the interior of
BMW in Frankfurt show (Maier 2013). This show provided the sensory exposure to
attract the attendees for exploring the latest car show experience.
In my opinion, I believe that the sales
of “The Boss” will be an uptrend. The new facelift of its X5 provides a wow
factor in the luxurious automobile market as its unique features will be the
main attraction to a lot of SUV lovers. According to Automakers & ANDC, it is
shown that the sales figure of BMW X5 was 44,445 units whereas the sales figure
of Mercedes-Benz M-Class was 38,101 units in 2012 (Cain 2013). It clearly
indicates that the sales figure of BMW X5 was better than Mercedes-Benz M-Class
in 2012.
Furthermore, “The Boss” has a sharp
styling look, high speed stability and third row seat option as compared to
Mercedes-Benz M-Class (Edmunds.com 2013). Hence, BMW X5 can be targeted to a wide
range of buyers as it includes a third row seat option which is more
family-friendly. This is the specialty of “The Boss” that different from Mercedes-Benz
M-Class only targeted the sport lovers. Also, the image of “The Boss” is
similar as its name, it provides us the feeling of royalty and comfortable. These
are the reasons for buyers to prefer BMW X5 over Mercedes-Benz M-Class. So, it raises
the luxury brand awareness for BMW as the image of “The Boss” has been
enhanced. Eventually, public will gain more confident for BMW which lead to an
increase in the total sales of BMW.
Other than that, 1,845,186
customers chose a vehicle of the brands BMW, MINI and Rolls-Royce in 2012. It is
also shown that the BMW Group rose 10.6% over the previous year record in 2011
(BMW Group 2013). In contrast, the corporate brands Mercedes-Benz, Smart and
Maybach achieved its sales result in 2012, with a total of 1,423,835 (Zetsche
2013). It reveals that the total sales figure of BMW exceeded Mercedes-Benz in
2012. Thus, it was a sign to prove that BMW will become the head of luxury
automakers in the world.
In conclusion, the stock price for
BMW was a bullish trend from January until September (Finance.Yahoo.com 2013). This
was because the latest revenue of BMW has surpassed Mercedes-Benz and Audi from
January until June 2013. It indicated that the sales figure of BMW was 804,000
units, ahead of Mercedes-Benz and Audi at 694,000 units and 780,500 units
respectively (Zalstein 2013). This will heighten the positive publicity for BMW.
Therefore, I believe that the stock price for BMW will increase gradually as
the sales figure of BMW will continue to rise, making BMW the lead position.
References
BMW
Group 2013, BMW Group posts highest sales
ever in 2012, viewed 14 September 2013, <http://www.bmwgroup.com/e/0_0_www_bmwgroup_com/investor_relations/corporate_news/news/2013/vertriebsmeldung_dezember_2012.html#>.
Cain,
T 2013, BMW
X5 Sales Figures, Automakers &
ANDC, GoodCarBadCar.net, viewed 14 September 2013, <http://www.goodcarbadcar.net/2011/01/bmw-x5-sales-figures.html>.
Cain,
T 2013, Mercedes-Benz
M-Class Sales Figures, Automakers
& ANDC, GoodCarBadCar.net, viewed 14 September 2013,
<http://www.goodcarbadcar.net/2011/01/mercedes-benz-m-class-sales-figures.html
>.
Edmunds.com
2013, 2013 BMW X5 Review, viewed 14
September 2013, <http://www.edmunds.com/bmw/x5/2013/>.
Finance.Yahoo.com 2013, Bayerische Motoren Werke Aktiengesellschaft
(BMW.DE), viewed 14 September 2013,
<http://uk.finance.yahoo.com/echarts?s=BMW.DE#symbol=bmw.de;range=1y;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;>.
Maier, A 2013, BMW’s
‘Boss’ SUV Targets Mercedes Gains to Defend Lead, Bloomberg, viewed 12
September 2013,
<http://www.bloomberg.com/news/2013-09-10/bmw-s-boss-suv-targets-mercedes-gains-to-defend-lead.html#disqus_thread>.
Zalstein,
D 2013, BMW stretches global sales lead
over Audi, Mercedez-Benz, CarAdvice, viewed 14 Septmeber 2013,
<http://www.caradvice.com.au/241014/bmw-stretches-global-sales-lead-over-audi-mercedes-benz/>.
Zetsche, D 2013, Mercedes-Benz
posts new sales record in 2012, Daimler, viewed 14 September 2013, <http://www.daimler.com/dccom/0-5-7153-1-1563447-1-0-0-0-0-0-16694-0-0-0-0-0-0-0-0.html>.
