Some BMW purists might consider it heresy, launching M performance versions of the 2010 X5 and X6 crossovers. Nevertheless, the new M vehicles, produced at Spartanburg, S.C., go on sale September 7.
Kay Segler, head of BMW's M division, has high hopes for the new models, despite the recession-stricken market. Expectations are particularly high for the Middle East and Eastern Europe, where buyers want larger vehicles, Segler says.
But the United States will remain the biggest market for the M division. U.S. sales last year totaled 9,738, out of 24,186 M units sold worldwide. U.S. sales in the first half of 2009 totaled 2,982.
The X5 M is priced at $86,225, and the X6 M starts at $89,725. That's a significant markup from the X5's base price of $48,325 and the X6's $56,725. Prices include shipping.
Segler, 54, took over the M division in May. He previously ran BMW's import market division--95 markets that do not have their own national sales units. He previously managed the Mini brand worldwide for nearly five years starting in 2004. Segler was interviewed at a press introduction of the X6 M and X5 M by staff reporter Diana T. Kurylko.
How is the M division performing in this depressed market?
Last year we sold 24,186 units, 50 percent better than the year before. It is always a cyclical business for us. We have peaks with new products that don't last as long as with normal cars. The M3 runs at a pretty stable sales rate; the M5 and M6 are more niche cars. With the new M X5 and M X6, we want to create a noncyclical business.
How is the United States faring?
We are down in the U.S., but not as much as the rest of the BMW brand. In all of our markets our sales have suffered, but we're far better off than we expected. The M5 and M6 are being phased out. And the M3, which came out in the United States in 2008, already hit its sales peak.
What percentage of total X5 and X6 sales do you expect these pricier M vehicles to represent?
There is no limit. We can adjust production to market demand. Maybe one out of five or six X5s or X6s could be an M. Word has to get out in the market. We won't do big marketing campaigns for these cars.
The United States is still the biggest market for M cars. Has its importance changed much with your move into new markets?
The U.S. is 45 percent of our sales. That number has always been very solid because the U.S. does a tremendous job promoting the M brand. They do a lot of driver training and local marketing. With M, we don't have buyers; we have performance maniacs that need to be treated as special people.
Why is the M division important to BMW?
One function is to energize BMW and be the pinnacle sporty portfolio for the BMW brand. We also have to create profit for the BMW Group.
What makes an M special? How much do you change the normal BMW production car?
M is a sports car, but one that can be driven all year. We don't just give it more horsepower and make the chassis a little stiffer. If you look at the M3, it's on the upper limit of how much we change. Seventy-five to 80 percent is modified.
Will you do an M7?
We've looked at that and decided not to do it. The 760 with AWD is a very strong offer. The M sales would be too small for our total investment.
How about a 1-series M or an M based on the new X1 crossover coming to Europe later this year and to the United States in 2011?
You need an entry into M price-wise, but whether we can do that economically has to be determined. Dreams are always there, but we have to pay for them. An X1 is not a car that we would have.
Give me a year or so to look into the 1 series.
(Source: Automotive News)