BMW Sees Sports-Car Heyday Over as Super-Rich Eyes WanderElisabeth Behrmann
BMW AG said sports cars may never find as many buyers as they did in the market’s glory days before the global recession.
“The sports-car market is roughly half of what it used to be,” Ian Robertson, BMW’s head of sales, said in an interview at the manufacturer’s headquarters in Munich. “Post-2008, it just collapsed. I’m not so sure it’ll ever fully recover.”
In Europe and North America, the car’s role as a status symbol has diminished, with sport-utility vehicles and their smaller crossover cousins becoming more popular. In China and emerging markets, Robertson said, hot weather, pollution and a penchant for chauffeur-driven limousines have made sports cars less popular among well-heeled clients.
Despite the downturn, selling a car built for speed and performance -- priced at a relatively high margin -- is an important part of building a brand’s allure. That’s why BMW, known for turning out sporty luxury vehicles, is teaming up with Toyota Motor Corp. to share development costs on a new mid-size sports car, Robertson said. The duo said last week their project has moved to the concept stage after completing a feasibility study. They declined to provide details.
Auto markets in Europe and North America, where cars like Daimler AG’s Mercedes-Benz SLK and Audi’s TT are popular in the sports segment, are recovering slowly after the financial crisis sent demand to the lowest in decades. Annual growth in excess of 10 percent in Asia has helped offset the declines.
Combined global sales of the TT, SLK and BMW’s Z4 peaked at about 114,000 in 2007 before slumping 45 percent by 2010, according to research company IHS Automotive. Demand in China has remained negligible, while global sales are expected to reach about 72,000 vehicles by the end of the decade, IHS said.
“The market has been diluted with more offerings designed to appeal to the kind of demographic traditionally associated with these models,” Tim Urquhart, a London-based analyst at IHS, said in an e-mail. “Young, urban upwardly mobile professionals are now able to buy a much wider range of lifestyle vehicles other than sports cars.”
BMW is boosting sales of its other vehicles even as the sports segment stagnates. Global deliveries for the brand gained 9.3 percent in the first 10 months of the year to 1.47 million cars, putting the group as a whole, including its Mini and Rolls-Royce nameplates, on track to sell more than 2 million vehicles this year, the company said today.
Automakers tend to look for partners to limit costs of developing new technology and small-scale vehicles. Other tie-ups include Daimler’s cooperation with the Renault SA-Nissan Motor Co. alliance, which has been gradually expanding beyond projects such as new versions of Daimler’s Smart city cars and Renault’s Twingo subcompact.
BMW, the world’s biggest maker of luxury cars, and Toyota agreed in 2013 to collaborate on the underpinnings of a vehicle, the most visible project within a broader partnership that also includes cooperation on fuel cells and lightweight technology.
BMW is “taking very progressive steps with this now, and we’ll see how it goes in the months ahead,” Robertson said.