As the saying goes: everyone sweeps for their own house. The era of electrification is shaking the foundations of car manufacturers. Currently, we can see different approaches and strategies depending on the company we are talking about. Each bet is on its course, although some are not very clear about it. BMW yes knows exactly what it wants and what it is going to do, as stated by its CEO, Oliver Zipse. The Germans will not part with their access range, the compact ones, quite the opposite.
Although we constantly talk about electrification, the best-selling model in the entire BMW range is the X1 with a 150-horsepower diesel engine. He alone takes the highest percentage of sales of the entire house, and that is why for the third generation that has just been presented, it is still present in the range. Everyone expects it to become the most popular version of all again. A very similar case is what happens with the BMW 1 Series, although in this case, the mix of engines is more even.
Zipse doesn’t understand why other premium manufacturers are abandoning or will abandon their access models. Although he hasn’t mentioned them specifically, it’s clear that the BMW CEO is speaking directly about his rivals at Mercedes. Those of Stuttgart long ago announced that they were not going to continue their range of compacts. The Mercedes Class A and the Mercedes Class B will not continue on the campus in the coming years. In addition to Oliver Zipse himself, many people do not understand this change in Mercedes’ strategy, because, as is the case with BMW, the access range is the company’s best-selling.
Premium brands are aspirational brands. Having a BMW, a Mercedes, or an Audi, for example, is synonymous with status. Quality, recognition, and branding come at a high price, which is why many buyers can only access the access range. Higher segment models shoot up their sale price, many of them being unaffordable to the majority public. Getting rid of the models that most people buy can be excessively risky, and that is why BMW does not understand the strategy of its rivals.
“We are not going to abandon the lower market segment. Even if you consider yourself a premium manufacturer, it is a mistake to abandon the lower market segment, that will be the core of your business in the future”, more clearly, water. In BMW the bet is divided. On the one hand, they know that the electric ones will gain sales quota, each new model that is launched on the market will have a 100% electric variant, as has happened with the BMW X1 and the BMW iX1, but prices will be limited access to many buyers, who will continue betting on more traditional approaches.
In this regard, the financial director of BMW assured last week that although they expect electric sales to double by the end of this year, the data announces that inflation and interest rates will weigh on orders, mainly in Europe. The electric car is still expensive, and nothing indicates that its prices will drop in the short term. Only time will dictate which company is right, although both may be right or wrong.