The X7 is not viable without the U.S.
BMW is the same as any modern automaker in one major respect: It’s heavily focusing on SUVs. Customers are purchasing more and more of them. Once they have tried a BMW X model they are hooked.
Harald Kruger (BMW Group chairman), stated that there are people who have moved from the 3Series sedan to the X3. “Most customers don’t come back, and they are loyal to these [SUVs].
BMW’s U.S. sales of cars have dropped 11.4 percent this year while SUV sales have increased by 13.5 percent. The volume of BMW’s year to date is now 37%. The 3 Series sales fell 13.7 percent in 2017, while the X3 sales increased by almost a third. Kruger believes that this is partly due to SUVs offering a driving experience that is appealing to owners.
He says that SUV drivers enjoy their seating position and the view of traffic.
BMW has had to overcome production issues in the past to supply as many X3s as possible to dealers. So, in addition to Spartanburg in South Carolina, , the new X3 is also being built in South Africa, and China.
He says, “That’s why in the future we will have three manufacturing sites because sometimes we couldn’t deliver as many of the X3s to America as we wanted.”
Even though demand is increasing in all markets, the U.S. still has a strong appetite for SUVs – even in segments BMW didn’t expect to be so popular with American buyers.
Kruger, who is the owner of the smallest SUV available here, says that theX1 was a surprise success. You might think of the X1 in the U.S. as a small car. But, we already sell large quantities of the X1.
American buyers are also looking for big cars. Dealers tell them that the X5 three-row version is not enough for an SUV. This is why BMW will launch the X7 next-year.
Kruger states that the new X7 will play a major role in the U.S. market, as we have not had a product in this segment until now.
Although the X7 will be sold worldwide, it was the SUV-hungry American market which really drove the business plan to build the new model.
He says, “We have markets such as China and Russia, they demand a product similar to this one.” It’s likely that it will be difficult to produce the product without a large U.S. market.