BMW sets limit on its own success
Monday 03 November 1997
The dilemma for BMW is one most car-makers would die for. Its British sales have risen so fast in the past two years that the company is worried the famous brand could be devalued to little more than an upmarket version of Ford or Vauxhall.
The numbers speak for themselves. This year, BMW's British operation expects to sell 62,000 cars - enough to grab more than 3 per cent of the entire market. It has turned the UK into BMW's third most important market overall, and its second biggest export earner after the US, where sales are on course to reach a record 115,000 this year.
In August alone, a record 19,764 BMWs were registered in Britain, a rise of 30 per cent on the year before and more than the company's entire sales in 1981. Most garages had sold out of stocks long before the R-registrations turned a wheel.
So concerned has BMW become by the figures that it has called for what managers describe as a period of "consolidation". In practice, this means that the company does not want the increase to continue unabated and has set itself an internal limit of 70,000 sales as its absolute maximum.
"This is a question of balancing our brand image. We could set a target of twice that number but it would damage our brand," said a spokesman.
The scale of the increase has even surprised BMW itself. Two years after the launch of the 5-series saloon, thought by many in the industry to be the most accomplished of all contenders in the "executive" bracket, sales are running almost 40 per cent ahead of 1996. Put simply, buyers no longer want to be seen in offerings from "volume" manufacturers when, for just a little more money, they can drive a BMW or an Audi.
The popularity of the 5-series speaks volumes for the transformation in the British car market, which has seen Ford's share plunge so far this year to just 18 per cent. The 5-series has surpassed all its competitors as the best-selling executive saloon, including the Rover 800, Vauxhall Omega and Ford Scorpio.
BMW puts the surge down to the boom in company profits, which has encouraged directors to change their cars more often or move further and further upmarket. "Prestige brands have clearly benefited from the economic recovery, at the expense of volume products," said the company.
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