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BMW diesels: Priced for profit

Automotive New reports on BMW's pricing and launch plans for its new diesels in North America.

Automotive News

Automotive News

BMW of North America LLC is pricing its new clean diesels for profit, not volume, in the United States, where acceptance is still a big question.

With diesel vehicles accounting for 67 percent of its sales in Europe and no experience with diesel here, BMW instead is shooting for higher profits, pricing its diesel vehicles above those of its major rivals. BMW will charge a premium that tops $4,000 for one model.

The pricing decision comes on the heels of a 63 percent drop in third-quarter net earnings, production cuts, and a 40,000-unit reduction in U.S. allocation in favor of more profitable markets.

The X5 xDrive35d diesel crossover will cost $52,025, compared with $47,925 for the X5 xDrive30i gasoline version. The 335d diesel will cost $44,725, up from $40,925 for the comparable gasoline version. Prices include shipping.

By contrast, Mercedes-Benz chose to charge less in an effort to increase demand for its diesels. Mercedes' ML320 Bluetec crossover costs $49,475, compared with $47,974 for the ML350 gasoline model--a $1,501 premium.

The Volkswagen Jetta diesel sedan and wagon have a premium of about $2,000. Audi has not priced its Q7 diesel, which goes on sale in January. Its executives have said they would put a premium of at least $3,000 on the diesel. BMW says both vehicles are eligible for an IRS advanced lean burn technology vehicles tax credit--$900 for the 335d and $1,550 for the diesel crossover.

BMW says that although diesel fuel costs more than premium gasoline--which all its vehicles require--the ultraclean diesels are about 30 percent more fuel-efficient. BMW says the 3-series diesel has a range of 560 miles on one tank, and the X5 can go 585 miles before refueling.

The X5 xDrive35d and 335d begin arriving at dealerships in late December.

(Source: Automotive News)