P&A Providers & Administrators
MenuMENU
SearchSEARCH

BMW Seen Widening Lead to Audi as 3-Series Hits Sweet Spot

October 15, 2011
4 min to read


Bayerische Motoren Werke AG is rolling out a revamped 3-Series sedan to widen the automaker’s luxury sales lead over Volkswagen AG's Audi and its aging A4.


The sixth generation of BMW’s best-selling model, which debuted today in Munich, will hit showrooms February 11, about two years before Audi overhauls the $32,500 A4. That head start may help BMW’s lead over Audi surge 43 percent in 2012, according to an IHS Automotive forecast.

Ad Loading...


Backed by the overhauled 3-Series and recently revamped 1- Series compact, which together accounted for 49 percent of BMW’s sales last year, “2012 will be the sweet spot for BMW,” said Stefan Bauknecht, a DWS Investment fund manager in Frankfurt. “The 3-Series renewal improves sales volumes and pricing power, creating an immense margin advantage.”


The renewed 3-Series, BMW’s entry-level sedan, will adopt parts and technology from the 1-Series and full-size 5-Series to lower production and development costs, reported Bloomberg. Higher profit from the car may help the manufacturer weather a looming economic slowdown. European Central Bank President Jean-Claude Trichet said this week that the region’s debt crisis has reached “a systemic dimension,” while China warned of “severe challenges” to the global economy.


“The model cycle is arguably more important for upscale carmakers than the economic cycle,” said Juergen Meyer, who manages about 700 million euros ($960 million) for SEB Asset Management in Frankfurt. BMW’s profitability lead “could reach its apex in 2012 on the 3-Series.”


BMW’s auto unit reported earnings before interest and taxes equivalent to 14.4 percent of sales in the second quarter, outpacing 11.8 percent at Audi and 10.7 percent at Daimler AG’s Mercedes-Benz. The Munich-based manufacturer has been the second-best performer in the Euro Stoxx autos and parts index over the past three months after tiremaker Pirelli & C. SpA, falling 22 percent compared with VW’s 24 percent drop and Daimler’s 29 percent slump.


The updated 3-Series, which was originally introduced in 1975, will be 9.3 centimeters (3.7 inches) larger than its predecessor and be available in Sport, Modern and Luxury packages to increase customization options. It will also be available with a head-up display, which projects speed limit and other data onto the windshield, and collision-warning systems. The 320d version, which can get as much as 57 miles per gallon, will start at 35,350 euros, 1,050 euros more than the current version. A hybrid will be available in the fall 2012.

Ad Loading...


The larger size and new customization options could help BMW win over customers from other manufacturers, according to Werner Entenmann, head of Autohaus Entenmann in Esslingen near Stuttgart.


“The new 3-Series has potential to capture customers” from the likes of Mercedes, Audi, Ford Motor Co. and General Motors Co.’s Opel, said Entenmann, who counts on the model to generate more than 35 percent of his dealership’s sales of about 1,400 BMW cars a year. He plans to hold an event for 4,000 customers when the model goes on sale Feb. 11. “It’s decisive for us,” he said.


Sales of the 3-Series are projected to jump 22 percent to 448,600 cars next year, boosting the BMW brand’s deliveries 9.3 percent to 1.47 million, according to IHS. Audi, which aims to grab the number-one position by 2015, will likely see the gap to BMW widen to 139,700 autos from 97,400 in 2011.


Mercedes, which likewise covets the luxury-car crown, may get closer to BMW, buoyed by a new line of compacts. IHS forecasts Mercedes trailing BMW by 108,700 vehicles in 2012, closer than the 110,500 this year.


“Renewing the 3-Series is like renewing the company,” said Christoph Stuermer, an IHS analyst in Frankfurt. “The 3- Series has to be BMW’s response to the automotive challenges of the next decade,” and therefore needs to address the demand for cleaner vehicles, while generating the profit needed to pay for further development.

Ad Loading...


BMW is investing more than 1 billion euros in German factories in Munich and Regensburg, and at a plant in Rosslyn, South Africa, to produce the model. BMW has sold more than 12 million of the vehicle since its introduction.


“The new BMW 3-Series has excellent prospects for expanding its leading global market position,” Chief Executive Officer Norbert Reithofer said today.


Mercedes and Audi aren’t sitting still. Audi plans to roll out a face-lifted version of the current A4, which was introduced in 2007, in the first half of 2012 with cleaner engines and other improvements, said Moritz Drechsel, a spokesman for the Ingolstadt, Germany-based carmaker.


Mercedes upgraded the C-Class in 2011 with new engines and a restyled front end and interior. Next year, the Stuttgart, Germany-based carmaker plans to show the CLC four-door coupe, which will include high-performance AMG versions, to target sportier 3-Series customers, said a person familiar with the matter, who declined to be identified discussing internal planning. The next-generation C-Class is due in 2014.


Those responses may not be enough to overcome BMW’s early start. IHS predicts the manufacturer will further expand its lead in 2015 to 219,100 vehicles over Audi and 141,500 over Mercedes.

Ad Loading...


“They have two to three years where they can absolutely nail it,” said Arndt Ellinghorst, a London-based analyst with Credit Suisse who has an “outperform” rating on BMW stock.

More Industry

Kia Niro SUV in gold color parked outdoors
Industryby Hannah MitchellSeptember 1, 2026

Kia Closes Out Summer With a Bang

Its U.S. subsidiary broke multiple records in August, in part due to a surge of demand for hybrids models.

Read More →
Outside of Auto Park Ford dealership
Industryby Lauren LawrenceSeptember 1, 2026

Indiana Dealership Changes Hands

A 30-year-old Ford dealership in Indiana has a new owner and will soon be undergoing renovations to meet manufacturer requirements.

Read More →
Three men standing in front of two classic cars handing off gift.
Industryby Hannah MitchellAugust 25, 2026

Texas Dealership No Longer in the Family

The Ford store, a longtime cornerstone of the Houston market, is now part of one of the fastest-growing U.S. auto groups.

Read More →
Ad Loading...
Outside of modern car dealership “Genesis of San Bruno
Industryby Lauren LawrenceAugust 25, 2026

Genesis Grows California Presence

The Cardinale Automotive Group opened its third Genesis rooftop in the Golden State, Genesis of San Bruno, a stand-alone dealership serving the San Francisco Bay Area.

Read More →
Red Honda Civic hybrid sedan on two lane road with green hills in background
Industryby Hannah MitchellAugust 21, 2026

August Auto Sales a Mixed Bag

An early forecast shows strong business despite consumer hurdles, and hybrids are a big piece of their affordability coping strategy.

Read More →
EV charger inserted into dark-colored car port
Industryby Hannah MitchellAugust 18, 2026

EV Market Humming Along

July sales show steady growth as the segment stabilizes from last year’s artificial surge following pullback of federal support.

Read More →
Ad Loading...
car in background with hand giving a thumbs up in front
Industryby Lauren LawrenceAugust 14, 2026

Auto Loan Delinquency Rates Stabilize

Auto loans are a main driver of nonmortgage consumer debt, but delinquency rates stabilized in the second quarter across all credit risk tiers.

Read More →
blue sky, yellow and orange rollercoaster with riders going up an incline
Industryby Lauren LawrenceAugust 12, 2026

EV Sales Recover in Q2

The EV sales roller coaster continues as numbers show improvement, but industry experts predict a year-over-year third-quarter decline and fourth-quarter jump.

Read More →
Photo of blue Toyota Prius parked next to body of water with city skyline in background
Industryby Hannah MitchellAugust 5, 2026

The Cheapest Hybrids to Fuel

The powertrain is increasing in popularity, in no small part due to its fuel economy. A new report lists the most efficient hybrids on the market.

Read More →
Ad Loading...
white SUV parked in front of a body of water with a gray sky background
Industryby Lauren LawrenceAugust 5, 2026

Hybrids and SUVs Gaining Ground

The most recent Kelley Blue Book Brand Watch found that only two nonluxury brands increased in shopper consideration, buoyed by their hybrid and SUV offerings.

Read More →