Why the future of the luxury car is the SUV.
Established luxury brands are getting ready to fight a new battle in the luxury segment that comes not only from their competition, but also from the enemy within…
That enemy being their equivalent luxury SUV.
Over the past few months we have seen “elite” SUV’s such as from established luxury marques such as Bentley – which if you look beyond the design, you can understand why.
Lamborghini’s URUS concept is actually quite striking in real life – it actually works from a design angle as well as a business proposition. The new Mercedes-Benz GL-Klasse is now thankfully more S-Klasse than ML-KlasseXL and we will soon be seeing an all new Range Rover.
Some are quick to make the assumption that their will be a Rolls-Royce SUV but BMW feel that a sportier X7 fills that high-end SAV role better than a RR. To make his point a photograph of a Cadillac Escalade with a Phantom front end was sent through BMW to show how ill-conceived it would be.
Industry analysts have predicted that the future for the luxury segment is within SUVs and “Downsized” luxury cars. At last weeks Beijing Auto show the onus was on the declining western market for large luxury sedans and rising market within China. But one factor was significant in both markets… The rise of the SUV.
One thing noticed is that a single luxury concept is no longer sustainable in this case, The BMW 7er can no longer stand as BMWs only high-end luxury offering. In China at least if we take the 7er into consideration the car achieves 52% of global sales , having dislodged the US from the no 1 position. The average age of a 7er owner in China is 28, nine out of ten 7ers sold in China are fully specified via BMW individual , and around five out of ten or thereabouts are the flagship 760Li . When everything is taken into consideration – The 7er does make a lot of profit for BMW.
The Mercedes-Benz S-Klasse also offers similar contributions but with sales in China at 40%. Apply this to potential SUVs and you can see why the “elite”SUV is the next big thing. Current SUVs are now just under 60%.
A refreshed Life cycle Impulse of the 7er is due in a few weeks , although BMW did unveil the car to a selected audience in Beijing taken into consideration its now largest market and customer base, BMW have expanded the attributes to appeal to that demographic by even offering exclusive BMW Individual finishes such as Moonstone as a Matte paint option.
Although the 7er stands at the top , BMW have had previous attempts to sustain the car in the luxury segment with both the 8er coupe and illfated CS Concept car which if you take the 6er Gran Coupe, is the phoenix that arose from the CS’s wreckage. To further sustain the car and increase profitability in the high end luxury segment , BMW are investigating several concepts that can help sustain the 7er and BMW’s presence within the luxury market.
Here we look at each tabled idea and probability.
BMW 7er XLi
Probability : Medium
The 7er XLi is reusing the idea of the previous E38 but is specifically aimed at China. Using an extended wheelbase made easy by the next generation modular matrix which can be stretched to accommodate. The XLi is seen as the car that (in China) at least if they cannot stretch to the Rolls-Royce brand this would be the next available choice. The car could also follow the 3erLi and 5erLi and be built in mainland China.
The X7 is very much progressing ahead even further than two previous incarnations. The SUV in elite form is the next growth segment . The recent Bentley and Lamborghini concepts were no fluke and despite the appearance (Bentley) they point to a new segment , something the current Range Rover investigated to a surprise success. Given the delicate history of the Rolls-Royce brand , both BMW’s CEO and RR CEO are not convinced that the SUV should be added to the RR brand. The next choice of course is BMW.
The concept of an X7 is not new at BMW , both were virtually conceived under the previous E53 X5 and current E70 as potential ideas incorporating the original BMW vision for the Range Rover – unsurpassed luxury , space and even with a V12 engine. The proposed X7 is not just a super-sized X5 , some designs equal a car with a more progressively sloping roofline which enhances its luxury credentials as well as a more luxury inspired interior. An X7 being based off the X5 and using 7er technology in both material and drivetrain would be a profitable choice for BMW , protecting the RR brand and offering customers the ultimate BMW SAV in a position to take a significant advantage out of the high end luxury SUV segment.
Given the importance of the SUV within any segment. By 2017 – BMW’s entire series line wil contain an SAV/SAC model. With lower designated SAC models offering the choice of 3dr and 5dr.
These models are highly profitable to BMW both in the present and the future.
BMW Large Coupe and Cabrio
Probability - Low
A larger coupe and cabrio is not effectively needed. Thanks to the 6er covering all bases, the CS Concept car was conceived to fill this niche with something the competition could not do at the time.
BMW CS II
The BMW board loved the CS , so did the designers and the engineers. Under Gerhard Richter the car promised much in terms of engineering and overall scope. It was a sad day when the car was cancelled due to the economic crisis. The CS was conceived to distance the BMW brand further from the competition and build that bridge to Rolls-Royce. Competitors only offered 2dr Coupes at that time in that luxury segment, BMW were aiming to be the first with the ultimate high end luxury performance Coupe. CS was even going to be an M.
The CS was consumed by the economic crisis which lead to a Lazarus effect with the 6er Gran Coupe which incorporates many CS proposals such as BMW Individual interiors and unique passenger arrangements.
A proposal for a second generation CS to sit on top of the BMW 7er is well into conception. With the next 7er allowing flexibility for CFRP use in the cars body and under structure.
The CS II will be well advanced in taking advantage of BMW’s lightweight philosophy. Both X7 and CS II would be considerable sustainment to the 7er and both be highly profitable.
An X8 is possible if it follows the same philosophy as the X6 and forthcoming X4 by being based on the equivalent model. Given the success of the X6 , an X8 is certainly an interesting proposition, however this car could actually be re-invented within the BMW i brand as the BMW i6 which is undergoing conception in Munich. i6 is effectively an SAC utilising the BMWi design language which in some cases , it can be mistaken for a raised and detail enhanced i8.