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BMW puts brakes on UK growth

BMW is capping volumes of popular models after deciding it has reached optimum size in the UK market.

In a move aimed at protecting its position as one of the leading premium brands, the German firm has drawn a line under the 127,000 registrations it achieved in Britain last year – its best result since taking charge of sales from importer TKM in 1980.

“We have enjoyed consistent expansion over three decades but the time has come to apply the brakes – we don’t want to jeopardise our position in the marketplace,” said BMW UK product and market planning chief Carl Sanderson.

Sanderson told AM that the company was no longer seeking higher volumes for core products.

“The 3 Series accounted for half our total sales in 2007 and the 1 Series won more than 23,000 registrations.

We would like to have as many cars as possible in the market, but there is an understanding that we have now achieved a level of business that is profitable for the company and the dealer network.

“We ask our 148 retailers to make considerable investments and it is not in the interests of anyone that they should be forced into discounting in order to move more volume.

“Equally, it would harm our reputation if there was a BMW on every street corner,” he said.

Sanderson, responsible for BMW planning marketing strategy up to 12 years into the future, said that, over the past five years, BMW’s core competition had moved from Mercedes-Benz to Audi, where the A3 and A4 models accounted for most volume.

“Our 3 and 5 Series lines could easily achieve annual sales of 120,000, but that would threaten our position.

#AM_ART_SPLIT#The plan is for us to stay at our current level for the time being,” he said.

“We have a diverse range and while we may have finished growing with our present product offer, additions that create fresh niche opportunities will create incremental volume.

“We are confident that will be the case in two years’ time when we launch X1, the four-wheel drive version of the 1 Series.

“Project i – the electric city car now under investigation – could also lead to a considerable business expansion.”

Dealers have already sold this year’s 1,600-unit allocation of the new X6 ahead of its May 31 on-sale date.

Next year BMW UK expects to be allocated 2,300 units of the vehicle, which it describes as a sports activity coupe (SAC). Around 85% of those sales will be the diesel variants.

X6 product manager Martin Sloan said that while the X5 had been acclaimed as the best handling SUV, it does not dominate the segment, and BMW expects X6 to make a statement in terms of style and performance.

He said: “The time is right to break the mould again with rivals such as the Porsche Cayenne, Range Rover Sport and the upcoming Infiniti FX.

The X6 is very dynamic in terms of handling.”

It uses BMW’s Dynamic Performance Control, available only in the X6, and unique in its ability to make a four-wheel drive vehicle, with its inherently mild understeer characteristic, to perform with the responsiveness of a rear-wheel-drive car.

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