# "The 1 Series will diminish the brand in the eyes of 7 Series buyers."



## MarcusSDCA (Jan 14, 2004)

Don't make me get my RoadFly swatter.


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## car_for_mom (Jul 15, 2002)

I am con-fus-ed 

People that are looking at the 1-Series, for the most part, don't have 7-Series money.

BMW not only sells cars in the United States of America, but elsewhere, and my impression is that Europe, Asia and the Middle East are the primary markets for the 1-Series, with the US of A as more of an afterthought?

People in the US want one of two things, ideally both: *size* and *power* - just look at the average parking lot; you can't see my little Karl Bimmer for all the Excursions, GMC Denali's, Ford F150's, Honda Odysseys (240 HP) and the like!

The 1-Series is a transitional vehicle in the Minds Of Marketing - first, get the young buyers into the Mini Cooper or 1-Series, then the 23-34 year olds in a 3-Series (if they've been really good and saved their pennies, or have rich parents, a M3)

At 35 or so, with 'tax deductions' in tow, move them towards a 5-Series, the X3 or X5.

Once they hit Corvette Age, entice the buyer with a M5 or 645; as they approach the Ensure Time Of Life, and they can still drive, then get them into a 745.



(however, I'm a 1958 baby, and I have a 325i...  )


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## andy_thomas (Oct 7, 2002)

SergioK said:


> 3 series owners out number 7 series owners by almost 6 to 1. I'd venture to say that if the 1 series becomes as popular as the 3 series... (I doubt), the execs at BMW would then say 'who cares what the 7 series owners think!'.


Who cares what Bob Lutz thinks? :dunno: On this basis I think his world starts on the East Coast and ends on the West. Next


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## e.biemold (Jul 11, 2003)

The cheapest 1-serie is more expensive then the cheapest 3 serie in the Netherlands. :dunno:


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## rost12 (Dec 22, 2001)

Dawg90 said:


> You can always tell the insecure luxocar buyers, for they feel the need to put down buyers of less expensive cars. Money never buys class, that's a given.


Lack of money doesn't quite buy class either. And hey, I'm glad I fit your stereotype of the world. Anything to make it easier


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## rost12 (Dec 22, 2001)

rumratt said:


> Yes, rost in particular is bitter toward those owning expensive cars.  :loco:


Bitter, hell yes! You pay this much and all you get is car that needs to be DRIVEN, requires new tires every summer and comes free of charge with a rattling rear shelf! Dang it all to hell, should've saved the kidney and bought a house


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## rost12 (Dec 22, 2001)

Dawg90 said:


> Yes, the whole segment is overpriced, but I guess I'll never understand the segment. To me, if you're gonna blow house downpayment kind of money on a car, it should be an object of desire, not some bloated ugly luxobarge.


Well, if you don't understand it, how can you judge it?


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## Alamo (Sep 17, 2004)

Alex Baumann said:


> *Discuss.*
> 
> Source :
> 
> ...


I believe what they are trying to do is get younger BMW buyers by introducing a more affordable entry level car. The younger you can get someone loyal to your brand the more likely they will stick to it and upgrade as their income increases. It's all about marketing the brand to future M & 7 series buyers.


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## cantona7 (Apr 8, 2004)

The only way that the 1er will diminish the brand is IF it becomes a gigantic runaway hit for a VERY long time. 

Every car manufacturer has--or tries to have--a single defining identity and a car that embodies that image. For BMW, it has traditionally been the 3er and its M variants that have embodied this identity. The 7er has never stood for what BMW is. Yes, it's the flagship and it does possess the qualities that make a BMW a BMW, but it never has been the standard bearer for the marque's heritage. The 7 exists for one reason only: to represent a market segment and make money for BMW AG. 

For the 1er to start tarnishing the brand--and I'm assuming that it will only diminish the brand because it moves BMW into the lower end of the market segment--it would really have to become the biggest hit in the history of BMW AG. And it would have to sustain enormous global sales in order to usurp the 3-series as the car that mainstream non-bimmer owners associate with the brand. I'm talking VW Golf-like sales worldwide through most of the 90s (and VW Beetle sales of the 60s). Anybody see this happening? I certainly don't. The 1er is designed to be the gateway drug that introduces new generations of drivers to BMW. And I think they're taking a very cautious approach to the whole endeavor, which is why the 1er is not coming to these shores yet. They've also been careful not to price the car too low--the pricing of the car is likely to prove the most crucial test of whether it will succeed in Europe, where there are lots of other very competitive sporty hatchbacks. 

At this point, the car most likely to diminish the brand for 7-series drivers, remains the 7er itself. As has been beaten to death by this point, most potential 7er shoppers will likely be turned off by the styling of the car. That is really a pity IMHO, because I think the 7er is a wonderful ride, and I was endlessly impressed once I got behind the wheel and got to drive and play around in it. I'm probably about 25 years too young for it, but I think that it's great for the segment it plays in. The upcoming facelift will probably do some good for it too.


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## Chris90 (Apr 7, 2003)

i certainly don't think the 1 will be a big hit at the current price. It's not in a class by itself like the 2002 or even the E30, the class is pretty full. 

GM probably wishes they had something smaller than the Queen Mary to attract luxury buyers with.


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## Chris90 (Apr 7, 2003)

rost12 said:


> Well, if you don't understand it, how can you judge it?


I'm not judging it, I'm dismissing it. A 911 or Ferrari interests me, but a 7 series is a car for old men. I drove a 540i auto once at the cancer drive, and couldn't wait to give it back.


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## JPinTO (Dec 20, 2001)

I'd rather have a 1 series as an entry BMW than the 320i. The 320i is a sad decontented excuse for an E46... and hopefully BMW Canada will axe it.


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## rost12 (Dec 22, 2001)

Dawg90 said:


> but a 7 series is a car for old men.


a) Given that you too will be old one day, I don't see how cars for old people are bad, in general.

b) I also fail to see how safety, comfort and prestige make it an "old man's car", given that at 7/10th it goes around the corners at least as well as my M5, even flatter. A touch more understeer, granted, but it's expected.

In other words, I see your point, and I'm glad I don't share it. Cheers


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## Chris90 (Apr 7, 2003)

rost12 said:


> a) Given that you too will be old one day, I don't see how cars for old people are bad, in general.
> 
> b) I also fail to see how safety, comfort and prestige make it an "old man's car", given that at 7/10th it goes around the corners at least as well as my M5, even flatter. A touch more understeer, granted, but it's expected.
> 
> In other words, I see your point, and I'm glad I don't share it. Cheers


An old guy can drive a sports car just like a young guy, it's all in your head.

But how it goes around corners is meaningless to me if I don't feel a thing while I'm driving. Take your M5 for example, a Mazdaspeed Protege will out corner it, and an STi might out accelerate it, but the M5 will thrill the driver with the sound and feel that you can't make up for with numbers on paper. You pay a ton of money, but you get something special. With the 7, you just get a poor imitation of your comfortable living room on wheels. I guess you can't show off your living room as easily, and that is the point.


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## e46shift (Oct 12, 2002)

if it is a hit, can you imagine the service areas being clogged up


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## rost12 (Dec 22, 2001)

Dawg90 said:


> With the 7, you just get a poor imitation of your comfortable living room on wheels. I guess you can't show off your living room as easily, and that is the point.


Nothing wrong with IKEA living rooms :rofl:


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## Desertnate (Mar 11, 2002)

rumratt said:


> I know. How are they going to deal with this? I already had to take my car to an independent shop for an NYS inspection because all of the local dealers were telling me there was a 4-6 week delay minimum.   WTF?


You need to move into the heartland of this great nation. I can often get into my dealer the same week if I don't want a loaner. For a loaner, I schedule 10 days out so they can juggle the fleet around for coverage.


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## Kaz (Dec 21, 2001)

e46shift said:


> if it is a hit, can you imagine the service areas being clogged up


If the cars were more reliable, this wouldn't be a problem.

I bet there aren't service drive lines at 7AM daily and 6week waits for appointments at the Acura dealer. I don't know if you have to sign up to get it, but one of the Lexus dealers here will bring a loaner to your house and pick up your broken car on a flatbed, and bring it back to you when its done.


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## Chris90 (Apr 7, 2003)

rost12 said:


> Nothing wrong with IKEA living rooms :rofl:


Sorry, I didn't get that one.

Here in the US, we're getting only a coupe right? can't imagine that being a huge volume.


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## drbmw (Oct 12, 2003)

Dawg90 said:


> You can always tell the insecure luxocar buyers, for they feel the need to put down buyers of less expensive cars. Money never buys class, that's a given.


He Dawg,
I venture to say that anybody that likes to drive would have a hard time giving up the 7er if they: a) were given the car to drive for 1-2 months, and b) got to drive comparable luxury cars in the same classs as the 7er. I will be the first to admit that the 7er is not love at first site. But let me tell you something, the car grows on you. Fast. Stop yer bitchin about the 7er. Be happy with what you drive or what you can afford to drive. Criticize the car only if you have the intent and ability to buy one.


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## andy_thomas (Oct 7, 2002)

JPinTO said:


> I'd rather have a 1 series as an entry BMW than the 320i. The 320i is a sad decontented excuse for an E46... and hopefully BMW Canada will axe it.


Do you think a 1er in Canada will be *better* equipped? (Hint: they're not )

It is odd that BMW CA saw fit to strip the 320i back to the point where it's *less* well equipped than even its domestic market counterpart. I am sure the target price point has something to do with it, but even alloy wheels can't have added *that* much more.


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## Chris90 (Apr 7, 2003)

drbmw said:


> He Dawg,
> I venture to say that anybody that likes to drive would have a hard time giving up the 7er if they: a) were given the car to drive for 1-2 months, and b) got to drive comparable luxury cars in the same classs as the 7er. I will be the first to admit that the 7er is not love at first site. But let me tell you something, the car grows on you. Fast. Stop yer bitchin about the 7er. Be happy with what you drive or what you can afford to drive. Criticize the car only if you have the intent and ability to buy one.


thanks for illustrating my point about insecure luxoboat owners who have to brag about having money to feel good about themselves. I'm sure the 7 is a blast to drive.


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## rost12 (Dec 22, 2001)

Dawg90 said:


> Sorry, I didn't get that one.


You said that showing off one's living room is not as easy as showing off a car, hence people buying luxury cars, those big expensive things you don't "get". Since 7er's interior (in matte wood trim) looks like it came from IKEA, I ventured forth to say that.... ahh, never mind! :rofl:


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## rost12 (Dec 22, 2001)

Dawg90 said:


> thanks for illustrating my point about insecure luxoboat owners who have to brag about having money to feel good about themselves. I'm sure the 7 is a blast to drive.


That's right, 7 series drivers have nothing better to do that put down the little E36 man. They're all out to get you!


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## Chris90 (Apr 7, 2003)

rost12 said:


> You said that showing off one's living room is not as easy as showing off a car, hence people buying luxury cars, those big expensive things you don't "get". Since 7er's interior (in matte wood trim) looks like it came from IKEA, I ventured forth to say that.... ahh, never mind! :rofl:


Ahh, I got it now, sorry!  I don't really follow the 7 series issues (like the interior).


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## Chris90 (Apr 7, 2003)

rost12 said:


> That's right, 7 series drivers have nothing better to do that put down the little E36 man. They're all out to get you!


Certainly they're not likely to be out joyriding. 

Sorry, it just pains me to think of people plunking down 911 GT3 money on such a boring car.


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## drbmw (Oct 12, 2003)

Dawg90 said:


> Certainly they're not likely to be out joyriding.
> 
> Sorry, it just pains me to think of people plunking down 911 GT3 money on such a boring car.


Wrong again, dog breath.
Not all 7 series buyers need Viagra and a cane to get around. I could be driving a GT3 right now, but only for a few months in the year. You see, there is this little driving obstacle up here in the Northland called snow. Kind of prevents the GT3 from even making out of the driveway. Now with some decent snow tires, the 7er is a great winter car. As far as boring. That's your opiinion. When I go out joyriding, the car corners without any roll. I mean flat. Acceleration is more than decent for a car that size. And at 120 mph, the car is whisper quiet. My joyrides are far from boring. It just pains me to think that there are dawgs in this world that are not only narrrow minded, but they let a car company wag their tails as well. Grow up puppy dawg.


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## Chris90 (Apr 7, 2003)

drbmw said:


> Wrong again, dog breath.
> Not all 7 series buyers need Viagra and a cane to get around. I could be driving a GT3 right now, but only for a few months in the year. You see, there is this little driving obstacle up here in the Northland called snow. Kind of prevents the GT3 from even making out of the driveway. Now with some decent snow tires, the 7er is a great winter car. As far as boring. That's your opiinion. When I go out joyriding, the car corners without any roll. I mean flat. Acceleration is more than decent for a car that size. And at 120 mph, the car is whisper quiet. My joyrides are far from boring. It just pains me to think that there are dawgs in this world that are not only narrrow minded, but they let a car company wag their tails as well. Grow up puppy dawg.


The Queen Mary corners flat too, I'm sure your boat is a blast in the twisties. They're real popular with the track junkies.


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## rruiter (Feb 10, 2004)

Alex Baumann said:


> *Discuss.*
> 
> Source :
> 
> ...


Coming from the man who brought back the GTO. lm*o....
Sounded good on paper but in reality they can't sell them. 2 months after introduction, a local dealer was selling them for 2K under INVOICE.
If that's not a failure I don't know what is. One would think they had learned their lesson after the Aztek. ah well. No oversized cavalier for me.


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## Chris90 (Apr 7, 2003)

rruiter said:


> Coming from the man who brought back the GTO. lm*o....
> Sounded good on paper but in reality they can't sell them. 2 months after introduction, a local dealer was selling them for 2K under INVOICE.
> If that's not a failure I don't know what is. One would think they had learned their lesson after the Aztek. ah well. No oversized cavalier for me.


Yeah, his mistake was the GTO is too bland looking to attract Camaro buyers, and it's too expensive to attract import buyers.


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## Artslinger (Sep 2, 2002)

BMW's 1 series will never win big numbers. With the combination of being a little over priced for the segment, and BMWs poor reliability compared to Japanese builders the car will be a so-so performer.


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## JPinTO (Dec 20, 2001)

andy_thomas said:


> Do you think a 1er in Canada will be *better* equipped? (Hint: they're not ).


Of course not... but at least the decontented spec will fit the 1 series better. I don't expect much from a 1er aka Golf... but I do know how good a E46 can be.

I just find a huge culture shock going from an M3 to a loaner 320i aka Camry.


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## car_for_mom (Jul 15, 2002)

Vipers, 'Vettes, Ferrari's, Mercedes SLR McLarens, Lamborghinis, etc are not *boring*cars.

S-Class Mercedes, 7-Series BMW, Audi A8 ain't too shabby, either!

However, the drivers of such cars are more likely than not to have a little gray in their hair and doubtless a bottle of glucosamine and chondroitin (a supplement to help with arthritis, you youngwhippersnappers  ) on the dresser for the simple reason that the *majority* of under-30 folks simply do not have the :bling: for (a) the car (b) the insurance and (b) the maintenance (12 quarts of 10W-60 Oil for a Ferrari comes to about $800 :yikes: )

There is something to be said for experience and wisdom - by the time I can afford an M5, hopefully I have the wisdom to know how to drive and care for it...


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## cwsqbm (Aug 4, 2004)

haigha said:


> LOL! Go drive a X5 4.4 or 4.8. And if you think I don't know what I'm talking about, I owned 3 series BMWs from 1986 to 2003.


Its all about image. Yes, SUV's can be quick and made to handle, but they are still starting with a handicap. A small, light car is the best basis for a sporty car, and that is the image BMW seems to want to project (why else build the 1er with RWD). Any SUV dilutes the sporty car image, no matter how competent.


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## ALEX325i (Dec 19, 2001)

That's BS to me... Does the A3 diminishes the brand in the eyes of A8 buyers?!? :dunno:


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## vehigal (Oct 30, 2004)

It might, if it doesn't convey the trio of images marketing experts deem to be inextricably associated with the BMW brand, namely wealth, power and athleticism.


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## andy_thomas (Oct 7, 2002)

JPinTO said:


> Of course not... but at least the decontented spec will fit the 1 series better. I don't expect much from a 1er aka Golf... but I do know how good a E46 can be.
> 
> I just find a huge culture shock going from an M3 to a loaner 320i aka Camry.


Interesting POV. Personally I can't see any connection whatsoever between a 320i and a Camry, other than similar numbers of wheels and seats. But when I go from a 320i to an M3 and vice versa, things - and I really don't why - feel kind of similar. Odd that.


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## Andre Yew (Jan 3, 2002)

A couple of people asked who Bob Lutz is, and I'm surprised no one answered. Among other things, he's one of the people responsible for starting BMW's M division when he worked at BMW in the 70s as VP of sales, so I think he has a clue or two about performance cars and selling them.

--Andre


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## woody underwood (Feb 9, 2004)

Andre Yew said:


> A couple of people asked who Bob Lutz is, and I'm surprised no one answered. Among other things, he's one of the people responsible for starting BMW's M division when he worked at BMW in the 70s as VP of sales, so I think he has a clue or two about performance cars and selling them.
> 
> --Andre


About Bob Lutz: He only worked for BMW 2 years 1970-73 as executive VP of sales Germany...I think the M division really got cooking a little later. Before that he was with GM Euro, Exide (Ever notice who makes BMW batteries?). Then Ford (Truck division), then Chrysler, back to Ford, then GM. Lot's of brand loyalty there huh? I don't think any of the aforementioned would give him a clue about marketing performance cars...as evidenced by the GTO.


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## Wallenrod (Nov 25, 2003)

That's ridiculous. It's like saying that making $30K a year does not make you want to become a billionair some day.
Or do people not pay over $50K to buy S4 only because Audi make some cheap ass FWD cars?
That's just absolutely insane.

I don't really think people's decisions are influenced by this at all. And I predict that BMW will make a bigger profit selling 1 series than selling 7 series. Not per unit but per volume. And isn't it all that BMW shareholders care about?


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## e46shift (Oct 12, 2002)

the thing is they would be competing with themself by bringing the 1 series. they already have the 1 series here. it's called  the mini cooper


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## woody underwood (Feb 9, 2004)

Wallenrod said:


> That's ridiculous. It's like saying that making $30K a year does not make you want to become a billionair some day.
> Or do people not pay over $50K to buy S4 only because Audi make some cheap ass FWD cars?
> That's just absolutely insane.
> 
> I don't really think people's decisions are influenced by this at all. And I predict that BMW will make a bigger profit selling 1 series than selling 7 series. Not per unit but per volume. And isn't it all that BMW shareholders care about?


There are no BMW shareholders so to speak, it's a privately owned company. And I doubt if any 7 owners will even know BMW makes a 1 series. The entry Audis must have really killed A8 sales here in the midwest cause I've never seen one in KC.


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## Wallenrod (Nov 25, 2003)

woody underwood said:


> There are no BMW shareholders so to speak, it's a privately owned company. And I doubt if any 7 owners will even know BMW makes a 1 series. The entry Audis must have really killed A8 sales here in the midwest cause I've never seen one in KC.


Woody,

I am aware of the Quandt's family domination of the BMW's shareholder structure but it is a public company afterall.


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## andy_thomas (Oct 7, 2002)

Andre Yew said:


> A couple of people asked who Bob Lutz is, and I'm surprised no one answered. Among other things, he's one of the people responsible for starting BMW's M division when he worked at BMW in the 70s as VP of sales, so I think he has a clue or two about performance cars and selling them.
> 
> --Andre


Clearly the ravages of time have got to him, and he now has the central-casting 'snob' attitude to BMWs. Shame.


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## Chendol (Jul 15, 2003)

*Ultimate Driving Minivan coming......*

:eeps: 
=============

BMW
The Ultimate Fairly Inexpensive Driving Machine
BMW wants to get bigger, and quickly. To do that, the world's 14th-largest car company is planning to sell-Beemer lovers, please avert your eyes-inexpensive hatchbacks and minivans. 
FORTUNE
Monday, October 18, 2004 
By Alex Taylor III

Helmut Panke, chairman of BMW, hates to say the word. He's in his stark, white office at the company's headquarters near Munich, describing a future vehicle his team is developing. A precise man who has a doctorate in nuclear science as well as a deep appreciation for exquisite engineering, Panke is fond of talking about the "DNA" of BMW. When he talks about the company's tradition and values, his entire body contorts with emotion. "A BMW will always be true BMW," he says. "We will never build a boring BMW." And yet the more he describes his new dream machine, the more the word he's avoiding hangs in the air. This means of conveyance will be large and roomy. (Min ...) It will have the utility of an SUV yet the handling of a BMW. (Miniv ...) As Panke talks, it's hard not to think "juice boxes" and "soccer practice." It can't be. A minivan?

Actually, Panke would prefer you use the term "space-functional concept." But in essence, yes, BMW is planning a minivan. It won't be out until the end of the decade, which will come as some relief to Beemer purists, but still. A BMW minivan?

Panke's loathing of the m-word has less to do with snobbery than with the fact that he's forcing the company through a major change. The minivan is just one part of a strategy to transform BMW from a specialized producer of sporty rides for high-income aesthetes into a full-line automaker, with a complete range of sedans, wagons, SUVs, roadsters, all of it. (Except pickup trucks. There's no danger that there will ever be a BMW pickup truck.) He has pledged to boost sales of the BMW group, which includes MINI and Rolls-Royce, from 1.1 million cars last year to 1.4 million by 2008. And his latest step in that direction is to head into unfamiliar territory: downmarket. In mid-September, BMW added a new, entry-level model called the 1 Series. The 1 Series won't be a small-volume promotional leader either-BMW expects to sell some 120,000 next year. After that will come the space-functional concept.

Panke is walking a dangerous line. On the one hand, he knows growth means expanding into new markets with new kinds of products. BMW ranks only 14th among the world's automakers, ahead of Mazda and behind Mitsubishi in global unit sales, which severely limits its economies of scale. Worse, all of its luxury competitors are divisions of larger, deep-pocketed corporations. Mercedes can tap the resources of DaimlerChrysler, and Lexus has a direct line into the cash vaults of Toyota. Enmeshed in a brutal competitive struggle, BMW needs all the resources it can muster. Because it is an independent company, it could plausibly become a takeover target at the first sign of weakness. (There is no hint that its controlling shareholders, Munich's very private Quandt family, who own 46.6% of the voting stock, have any intention of selling. But that could change if BMW's leadership position starts to slip. There's no reason for the family to own the stock if the company stops growing and paying dividends.)

On the other hand, there's the high-end BMW cachet to protect. The company is revered by millions of owners and fans for engineering cars that put the driver first. For many customers, buying a BMW is like joining a semi-exclusive club. "BMW is the most charismatic brand, and charisma is something you can't buy or manufacture," says analyst Rebecca Lindland of Global Insight in Boston. "People would rather have a used BMW than a new anything else. And once they are in it, people don't leave." High prestige, of course, is highly valuable: BMW's profit margins are among the richest in the industry.

Panke's mass-with-class strategy puts that cachet in peril. BMWs command premium prices partly because of their scarcity. Once BMWs turn up at every mall and hockey rink, the snob appeal will disappear. Panke and his team are painfully aware of the case of Cadillac, whose long decline accelerated in 1982 after it bolted its wreath-and-crest to the hood of a humble Chevrolet Cavalier and renamed it the Cimarron. Buyers were not amused.

Even in times of stability, BMW executives tend to be anxious. Acutely conscious of the value of the brand, they fret endlessly about what BMWs look like and how they perform. The slightest model changes cause endless handwringing by the company-and relentless backseat driving by financial analysts, the automotive press, and all those Beemer fanatics the world over. Typical is chief designer Chris Bangle, who worried that buyers might confuse the new entry-level car with the 3 Series, the next most expensive model in the BMW lineup, and then declared, "The 1 from every angle is not a 3."

That obsessiveness should give you some idea of the intensity with which Panke and his engineers are gauging reactions to the 1 Series. It's still too early to say for sure whether BMW has avoided a Cadillac-like detour. The response at the Paris Auto Show, where the car was introduced, was tepid. The sweltering crowd of journalists in the humid exhibition hall was far more interested in the unveiling of the M5, BMW's superfast, limited-production sedan. And BMW itself made a much bigger deal out of its new, hydrogen-powered racecar (see Clean Fuel the BMW Way). But early reviews have been positive, and customers in Europe and Asia have been enthusiastic. They bought more than 5,600 of the 1 Series cars in a little under two weeks.

Clearly BMW is embarking on its expansion from a position of strength. Unit sales are up 8.8% so far this year, and it sold more cars in September than in any other month in its history. In the U.S. it sold 240,859 BMW-branded cars in 2003, beating Mercedes for the third year in a row and making America its largest single market. Although BMW's revenues are a fourth of GM's, its market cap is $27.2 billion to GM's $23.6 billion.

With a base price of about $25,300, the 1 Series costs about $5,000 less than BMW's current lowest-priced sedan and makes club membership available to a whole new kind of customer. Moreover, the 1 enters BMW into the burgeoning global market for compact cars, a segment populated by such stalwarts as the Volkswagen Golf and Toyota Corolla. About 12.6 million such cars were sold last year. Panke figures that demand will increase 20% by 2010, while the market for more expensive models in that class-the Mercedes A Class, Audi A3, and BMW 1 Series-will grow 50%. So far the idea of a small luxury car is a European phenomenon. The Mercedes A Class won't arrive in the U.S. for several years, and the Audi A3 isn't expected here at all.

BMW is proceeding gingerly with the 1 in the U.S. because it was burned by the reception given an earlier entry-level car. It sold the two-door hatchback 318ti in the U.S. from 1995 to 1999 before withdrawing it from the market. The 318ti bore a strong family resemblance to the full-size 3 Series and competed with it for customers, rather than attracting the younger buyers BMW had hoped for. The other problem: Americans don't believe in hatchbacks on fancy cars. While hatches are becoming accepted by upscale customers in Europe and Asia, Panke has decreed that the hatch does not fit BMW's American image. The U.S. won't get a 1 Series car until 2007, when BMW will export one with a proper trunk and a six-cylinder engine.

Panke and design chief Bangle have made sure that the 1 Series looks and feels every bit the BMW. While every other car in the segment is driven through its front wheels, the 1 Series has rear-wheel drive, as does the rest of the BMW line. That layout extends the engine bay back toward the passenger compartment, cramping rear seat room, but it provides the kind of dynamic handling that BMW is convinced separates its cars from the competition's. Everything from the steering wheel and the gearshift lever to the dials on the instrument panel looks and feels comfortably Beemerian. (About 60% of the 1 Series' parts as measured by value come from the 3.)

A brief test drive into the countryside south of Munich confirms the value of the rear-drive/rear-legroom tradeoff. Acceleration is brisk (0 to 62 mph in 8.7 seconds), and the 1 Series carves a tight line through turns while tracking solidly at speeds over 100 miles per hour. Analysts at Bernstein Research expect sales to reach 300,000 annually once all the body styles are on the market. That would make the 1 the second most popular BMW after the 3 Series.

Convincing buyers that the 1 Series is echt BMW will be easy compared with winning them over on minivans. Panke sees two potential models. The first is supposed to be a roomy sports tourer similar to the Chrysler Pacifica, only with lots more amenities. The second would be a nimbler half-SUV/half-car crossover vehicle that sounds a bit like an Infiniti FX45. But, without getting into the details, Panke says he's going for something different. Whatever he has in mind, he'll have to make a decision soon if he wants to have his space-functional concept on the market by 2007 or 2008 as planned.

Panke's decision to grow BMW organically is a 180-turn from a strategy that blew up in the company's face a decade ago. In 1994, Panke's predecessor Bernd Pischetsrieder bought Rover Cars in the belief that BMW could convert the failing British brand into a second line of cars. Rover continued to decline under BMW ownership. By the time the company woke up to that fact and tried to fix it by airlifting in German engineers and investing millions of deutsche marks, it was too late. Rover's collapse forced Pischetsrieder's resignation in 1999, and in 2000 the company paid a British private-equity group $755 million to take Rover off its hands. The misadventure cost the company more than $4 billion. The sole reward has been Rover's MINI, which has developed into a robust business since its relaunch in 2002.

After the Rover catastrophe, BMW flirted with artistic disaster in its design department. Traditionally, BMWs have borne a distinct family resemblance, with the small 3 Series sharing the same proportions and design cues as the mid-sized 5 and top-of-the-line 7. That was reassuring to longtime customers, but in the late 1990s, executives decided that the similarity was dampening sales. "BMW was criticized, clobbered, and basically nailed to the wall for having identical designs for the 3, the 5, and the 7," says Panke.

BMW's American-born designer Bangle took on the task of stretching the company's design envelope. Bangle performed his first makeover on the 2002 model 7, restyling the front end, stretching the passenger compartment, and creating a high-deck, short-lid trunk that was quickly dubbed the "Bangle butt." Customers and critics who were put off by the shock of the new also hated the decision of BMW engineers to try something different inside the car. They installed a tilting, plunging, rotating knob on the console to control hundreds of electronic features-and managed to complicate life for drivers rather than simplify it.

Traditionalists were outraged by both changes, and Bangle was subject to virulent personal attacks on the Internet, including a "Stop Chris Bangle" website that collected more than 10,000 signatures. (Sample: "Bangle is the worst that's ever happened in BMW's history of making the finest cars in the world!") Another wave of criticism broke when Bangle's new 5 Series, in some ways even more radically reshaped, appeared in 2003. Yet for all the brouhaha, BMW sales haven't noticeably suffered, and the cars retain more of their value than almost any other make. Automotive Lease Guide projects that 7 Series cars will be worth 54% of their new-car price after three years of ownership, vs. 52% for the Mercedes S Class and 50% for the Audi A8.

Panke defends the decision to inaugurate the new styling direction with the 7 Series because that was the first model due for an overhaul, but concedes that his call "can be challenged." He is beginning to feel vindicated, though. With the styling of the 1 Series creating only a quiet murmur, he says, "I would say the controversy over the design is basically not there anymore, at least in Europe." Many analysts agree. "I think Bangle has been proved mostly right," says Graeme Maxton of Britain's Autopolis consultants. "His designs are not to everyone's taste, but they are also distinctive and bold in an industry that often fears any radical change."

The controversy may have died down, but life won't be getting any easier. Mercedes is expanding its range of models; Lexus continues to add style to its already superbly built cars, and Cadillac is in the midst of a $4 billion makeover. BMW has to continue to move faster than everyone else in order to stay on top.

And even if the 1 Series does become a hit, there's still that cachet problem. Imagine the dealerships: Big shots shopping for $76,000 6 Series convertibles while sneering at entry-level couples asking about cupholders. It is not a recipe for retail harmoniousness. "I think the plans are risky," says Maxton. "Taking a brand like this into the middle market is a mistake to me, and one that could be hard to reverse. It carries the risk of brand degradation." There's a potential financial impact too: More small cars will dilute the fat margins BMW enjoys on large cars. And the 1 Series could cannibalize sales of the more expensive 3 Series, just as the 318ti did.

But this is a road that BMW must travel. The risks of not growing are too high. The 1 Series, the minivans, and whatever other downmarket line extensions BMW dreams up give it an opportunity to attract younger buyers. It wants to lure budding careerists even if they never make their first million.

Panke likes to say BMW shares a philosophy with another purveyor of premium products: Starbucks. When customers go to a Starbucks, they know they are getting Starbucks coffee, whether they order espresso or a Frappuccino. "You would not go to Starbucks to look for some freshly made carrot soup." It's the DNA thing again. When you buy a BMW, you don't want a cheap imitation. The hardest part of his job now is making sure that never happens.


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## Mr. Bimmer (Apr 8, 2003)

It is funny how the above article jumps to these paranoid delusions of BMW building a minivan, yet throughout the article, Pancke doesn't mention a word of it. I have a hard time understanding why so many people still buy in to the BMW minivan conspiracy. As I recall, when confronted with the P-shops shown on the net about 2 years ago hypothesizing the new BMW "minivan", Pancke personally stated that BMW would never produce a minivan now or in the future.

And secondly, whats the author trying to get at anyway? Mercedes already makes quite a large series of vans (V-series, Vanio) for commercial and passenger use.


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## swchang (Oct 5, 2003)

I honestly wouldn't mind a minivan...

Also, what's the deal with the A-class vs A3 vs 1-series? I guess out of the current MB lineup, the A-class is the most comparable car. However, I thought they were creating a B-class to truly compete, as the A-class is a little smaller.

Lastly, I thought the A3 was coming to the US next year. The article says otherwise. Hmm...


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## Jeff_DML (Mar 13, 2002)

swchang said:


> Lastly, I thought the A3 was coming to the US next year. The article says otherwise. Hmm...


article was wrong


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## swchang (Oct 5, 2003)

Jeff_DML said:


> article was wrong


Better be. I'm hoping strong sales of the A3 will spur MB and BMW to bring their counterparts over faster, as well as induce Lexus, etc. to create better and cheaper rivals. Small, sporty hatches with good gas mileage get a big :thumbup: in my book.


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## Technic (Jun 24, 2002)

What BMW should do is merge with Honda to create the best auto company in the world.


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## Section_8 (Jan 10, 2004)

Wallenrod said:


> That's ridiculous. It's like saying that making $30K a year does not make you want to become a billionair some day.
> Or do people not pay over $50K to buy S4 only because Audi make some cheap ass FWD cars?
> That's just absolutely insane.
> 
> I don't really think people's decisions are influenced by this at all. And I predict that BMW will make a bigger profit selling 1 series than selling 7 series. Not per unit but per volume. And isn't it all that BMW shareholders care about?


This is what any global corporate company will say it's goals are: To increase the profits of the shareholders.

Everything else is just loose change.

I think the 1 will do pretty good here, especially since they announced it'll only be released with the i6 2.5l in the states. That will be a pretty fast light hatch.. Great car for BMW owners to get for their wives, kids, or for themselves as a inexpensive track car after they've aged a bit on the market..


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## Artslinger (Sep 2, 2002)

IMO BMW will never get the 1 Series right to be a success in the US. The first major obstacle will be reliability and indifferent service departments. In this buyer segment this will be a big strike against you. 

Strike one right off the bat.

Will BMW offer the 4yr/50k full warranty on a car in this price range?


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## mrbmwrob (Nov 8, 2004)

I don't see why not


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## Wallenrod (Nov 25, 2003)

Artslinger said:


> IMO BMW will never get the 1 Series right to be a success in the US. The first major obstacle will be reliability and indifferent service departments. In this buyer segment this will be a big strike against you.
> 
> Strike one right off the bat.
> 
> Will BMW offer the 4yr/50k full warranty on a car in this price range?


It will sell like hotcakes. Just like the Mini does. And that's with all it's reliability problems. But for different reasons. It will give another group of buyers a chance to show off having a BMW. They will be selling more a brand than a car here so to speak. 
Did all these dealership and service department problems keep people from owning a 3 series here? No. Same with 1 series. Same with Golf and VW in general. Talk about reliability!
Buick scores higher on reliability than BMW (if you want to believe these ratings) but do you see young people who running to Buick to buy their cars? 
And I don't even like the new 1 series. But I love hatches. I hope it will come here and convince more Americans to buy them.


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## solsurfr (Oct 19, 2003)

Wait till the BMW Minivan comes out. All hell will break loose then!


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## jhaybert (Nov 12, 2006)

Adding a series to any brand does nothing to deminish the brand, if done well. BMW has in the past, and hopefully will continue in the future, to do what it does best, build great cars no matter what the price level.


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## Swift (Mar 23, 2007)

June 2003???


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## st_o_p (Sep 30, 2003)

swchang said:


> I honestly wouldn't mind a minivan...
> 
> Also, what's the deal with the A-class vs A3 vs 1-series? I guess out of the current MB lineup, the A-class is the most comparable car. However, I thought they were creating a B-class to truly compete, as the A-class is a little smaller.
> 
> Lastly, I thought the A3 was coming to the US next year. The article says otherwise. Hmm...


A-class sucks big time :thumbdwn: 
I don't see it being a big seller in the US by any means. It's a small city car and doesn't do well on a highway (you can literally feel the steering wheel dancing in your hands). I wouldn't compare it to Mini or 1-series (although admitedly I haven't driven a 1).

Plus when speaking with friends MB owners in Germany, they basically said they don't consider the A to be a real Mercedes :dunno:


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## dbtheo (Apr 24, 2006)

Swift said:


> June 2003???


exactly what I was thinking, but I had never seen that article before, and it was still an interesting read.


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## iwanna330cic (Feb 21, 2005)

In part, the article says,

"On May 19, the specially invited guests weren't there to gawk at the Picassos and Mirós. They were assembled to appraise the art Bavarians love best: The latest model from Bayerische Motoren Werke. More than 100 German car dealers crowded around the revamped 5 Series sedan,_ the heart of the BMW franchise."
_
That's odd - I thought the 3-series was the heart of the BMW franchise. I guess I was misinformed.


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