BMW hopeful for more success in 2012
Liz Hochstedler, Associate Editor
November 28, 2011
Filed under Features
New models expected to boost market share
BMW Motorrad didn’t tout outrageous year-over-year growth in 2011, but that wasn’t because the company didn’t see success. In fact, BMW Motorrad posted record profits, record wholesale and retail sales and record market share.
The reason for the lack of huge year-over-year improvement wasn’t due to a lackluster year for BMW. Instead, it was due to the preparations and procedures put in place during the recession that kept the company moving during tough economic times.
When the downturn hit the United States, BMW Motorrad continued to innovate, entering the sport bike market and launching other new models. BMW Financial Services also continued to loan to consumers, spurring sales when others saw dramatic decreases.
Those positive moves have also poised BMW for success through 2011.
“We’re probably going to be somewhere in that 6-8 percent growth this year when everything’s said and done at retail,” said Todd Andersen, manager of marketing for BMW Motorrad. “In a market that’s still declining, we think that’s really good.”
The company’s new 6-cylinder K 1600 GT and K 1600 GTL are moving well, and the S 1000 RR sport bike has been the No. 1 selling motorcycle for BMW this year.
BMW Financial Services has also allowed more customers to afford the company’s motorcycles by introducing 3asy Ride (pronounced Easy Ride), a plan that allows customers to make small, manageable payments with a balloon payment at the conclusion of the term period. When the balloon payment approaches, customers can refinance the bike, trade-in their motorcycle, or simply choose to pay the vehicle off.
“3asy Ride is probably the first balloon-type financing program that’s been broadly used in the motorcycle industry that any of us are aware of, and it allows customers to get smaller payments, kind of like a lease,” Andersen said.
The launch of new models and financing plans not only poised BMW for record profits, market share and wholesale and retail sales in 2011, but they’re also positioning the company for growth again in 2012.
“We’re targeting for next year another really good year for the U.S. and worldwide,” Andersen explained.
Leading the charge for 2012 are new and updated models. BMW unveiled its first maxi scooters, the BMW C 600 Sport and the BMW C 650 GT, in early November at EICMA. The models will be introduced to the U.S. market in late spring or early summer.
“I think BMW entering that segment can bring eyes to a market that’s very important in the rest of the world but not yet in the U.S.,” Andersen said. “We have very high expectations for those.”
In addition, BMW launched the F 800 R naked bike and special edition models of the R 1200 R and the K 1300. The S 1000 RR has also received numerous updates in ride precision, agility and power delivery. And with 2012 as the first full-year with the 6-cylinder K 1600 and K 1600 GTL, they’re expected to become the top sellers for BMW.
“We’ve got a fairly broad array of new and updated product for next year. We’re expecting good things,” Andersen explained.
BMW also announced earlier this year that all of its models will come standard with anti-lock brakes, beginning with the 2012 model year.
“We just felt that it was time to make a statement in the U.S. about the importance of ABS by putting it on all of our bikes,” Andersen said.
BMW, which was the first OEM to introduce motorcycles with ABS, believes ABS is even more important on a motorcycle than a car because of how a motorcycle needs to brake. ABS also adds reassurance for many riders and has been a popular add-on to many BMW motorcycles.
“The vast majority of our motorcycles in the U.S. and worldwide are being sold with ABS, even when we offered it as an option,” Andersen reported.
With the improvements to its lineup, BMW expects to again gain market share in the United States in 2012, a feat it has accomplished each year since 2000.
“I expect that our share will grow in 2012, because I expect our growth will outpace the market,” Andersen projected.
Andersen doesn’t anticipate any dramatic shifts in motorcycle sales overall in 2012, but he expects BMW will have a double-digit market share increase in 2012 as the company sees its own increase in sales.
“Both BMW and other companies — Ducati, Triumph and others — have shown that when you have a good, new product, that people will come off the sidelines and back into the market,” Andersen said.
More important than market share, he says, are retail sales.
“We’re really focused on how many units we’re selling because it’s the number of bikes that our dealers are selling that makes them profitable,” Andersen explained.
BMW has about 140 dealers in the United States, and the company is comfortable at that level.
“We’re not in the volume business, we’re in the premium experience business,” Andersen said.
BMW has a few open points in the country where there are holes in the market or where other dealerships have closed, but it’s not looking to add many in 2012. Three or four of the current openings will already be filled by the end of 2011.
“We will continue to add dealers where the market size and market opportunity says we need a dealer,” Andersen said.
He credited much of BMW’s success in recent years to the company’s dealers.
“We’ve got a really, really great group of dealers out there who have really done a good job in the worst economic times that we’ve seen since the ’80s. Our dealers, they just nailed it,” he raved.
The U.S. market continues to be a priority for the German company because of the wealth of opportunities for sales.
“The U.S. market is still the biggest market for large capacity motorcycles in the world, even after the decrease since 2008,” Andersen explained.
The K 1600 GTL, for example, was designed specifically for the U.S. market. And armed with the fact that about one-third of the sport bikes worldwide are sold in the United States, BMW designed the S 1000 RR for the American consumer.
“The company invests in those types of products, showing how seriously the folks in Germany take the U.S. market,” Andersen said.
By paying close attention to what its consumers want and successfully handling a rough economy, BMW has been able to hang tough during hard economic times and is now prepared for a positive 2012.