BMW Executive Expects Mercedes to Start 2012 as Top Seller

Bayerische Motoren Werke AG (BMW)’s BMW, on a pace to become the top-selling luxury auto brand in the U.S. this year, will probably be outsold by Daimler AG (DAI)’s Mercedes-Benz early next year, a top executive said.

Updated C-Class compact Mercedes models will go on sale later this year and probably make that brand the top seller in the first quarter while BMW is still selling older 3-Series models, said Jim O’Donnell, head of BMW U.S. operations. As a result, Mercedes may lead in deliveries for a few months, he said.

“In the first quarter of next year, I would say Mercedes” will be No. 1, he said. “Mercedes going into 2012 in the first quarter will be in a strong position. Over the course of the year, we still should be ahead of Mercedes.”

The new 3-Series, which reaches dealers in April, will help produce a BMW-brand increase of 12 percent to 15 percent next year, he said. The Munich-based automaker expects to be pursuing back-to-back years as the top luxury brand in the market.

BMW’s U.S. sales rose 13 percent to 135,114 through July, placing it 5,182 vehicles ahead of Mercedes. Toyota Motor Corp. (7203)’s Lexus brand deliveries fell 19 percent to 102,549 through July as the automaker copes with inventory constraints from the March earthquake and tsunami. Lexus has been the top- selling luxury brand in the U.S. for the past 11 years.

The results exclude Daimler’s Sprinter vans and Smart cars and BMW’s Mini brand, which aren’t luxury vehicles.

BMW is “on pace” to become the U.S.’s top selling luxury brand this year, said Ian Robertson, BMW’s top sales executive, told reporters today in Carmel, California.

Slower Growth

Sales growth globally will probably be “slightly lower” in the second half of this year, he said, because of model changeovers and questions about worldwide economic stability.

“I don’t think any of us can underestimate what’s happening on the economic front,” he said. “The word that we would use is that we are ‘cautious.’”

BMW’s success this year has been driven by the redesigned midsize 5-Series line, introduced last year, and X3 sport- utility vehicle.

The automaker delayed the introduction of the base 5-Series until this quarter as part of its effort to put a new four- cylinder engine in the vehicle, O’Donnell said. The all-wheel- drive version should further fuel BMW’s growth.

Trailing Goal

While sales are up for BMW, the brand is about 3,000 short of its projected goal for the year so far, O’Donnell said. Shortages of the X3, X5 and all-wheel drive 3-Series and 5-Series cars have caused lost sales, he said.

“Worldwide, the demand for all-wheel driving is increasing,” he said. “We’ve been surprised by the success, particularly in Europe, and we’re not getting the share that we anticipated, so we’re suffering.”

O’Donnell, 61, is retiring from BMW this year as part of the company’s mandatory age-60 retirement program, he said.

The brand’s sales in the U.S. are “reasonably” consistent, Robertson said.

“We’re bringing models into the U.S. that are strong models right now,” he said today in an interview.

To contact the reporter on this story: Tim Higgins in Southfield, Michigan at thiggins21@bloomberg.net.

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net

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