01-04-2013, 09:28 PM
Worlds Foremost Authority
Location: Upper East Side Manhattan - Lime Rock CT
Join Date: Jul 2007
Mein Auto: M4 Cabrio - Cayenne GTS
I think BMW learned a lot from Lexus (what is debatable is whether Lexus learned anything from Lexus). In the 1970s Toyota (Lexus) was looking very far into the future and was planning on bringing a car to market that would be in place when their loyal customers were ready to move upmarket. What they did not do is loose sight of what made their customers loyal which was value and reliability. When the Lexus brand was introduced they were in the right place at the right time. The average age of Cadillac (the best selling luxury brand at the time) was increasing every year and Lexus had a youthful image. Now Lexus is in the same position as the average age of a Lexus customer is increasing every year. Lexus is also very aware of the fact that their cars are viewed as being bland and not particularly involving to drive. They are aware that this is hurting them and that is why they came out with the LF-A, which was an image car that they probably lost money on.
Originally Posted by tturedraider
And, as you yourself have kept us abreast from your conversations with BMW executive types, they remain keenly aware of what got them where they are today.
When I look at BMW's "i" car development and their carbon fiber development it gives me confidence that BMW is forward looking enough that their success will continue.
The problem with selling to the "Status Symbol" crowd is that they tend to be very unlnowlegable, fickle, are primarily buying purely for the badge. As their perception changes they will leave the brand. This may take a while as there were still loyal Cadillac buyers who were convinced that they were buying high quality status symbols when Cadillac was selling anachronistic, unreliable junk.
A number of years ago I spoke to someone from Timberline (the shoe company) whose products had become a huge fad among yuppies and urban youth. He explained that although they certainly appreciated the spike in business Timberline was not going to go to any great expense to market to what they viewed as a very transient market that could disappear as fast as it has appeared. They continued to cater to their long term clientele and this proved to be a very smart move.
Today Cadillac is fighting to regain the position at the top of the luxury car market that they contolled at one time. Cadillac has done this before although this was a long time ago. In the late 1920s Cadillac was in the position of being viewed as a staid, old man's car. GM President Alfred Sloan and legendary designer Harley Earl introduced the LaSalle (in case anyone was wondering what Archie and Edith were singing about when they said "Gee our old LaSalle ran great") which was in a sense the first Yuppie car (long before the term Yuppie was coined). The LaSalle was a sporty more youthful oriented Cadillac. The LaSalle brand did not survive World War II but it had a large influence on post war Cadillacs which dominated the post war luxury car market and sat at the top of the GM brand hierarchy of Chevrolet, Pontiac, Oldsmobile, Buick and Cadillac. In those days the 5 GM brands were very different and shared few components. For instance each brand had unique V8 engines. The post war Cadillacs were viewed as high performance luxury cars and the name Cadillac was synonymous with quality, luxury and prestige.
Perhaps Cadillac should have done the same thing again and branded the CTS and the ATS as LaSalles instead of Cadillac. It probably occurred to them and the idea was rejected.
Now BMW is in a sense at a crossroads. As they gain market share they need to build cars that appeal to a wider audience without losing appeal to the customer base that built the brand. Whether they succeed or not (and I suspect they will) will not be obvious for several years but as history has shown when you are at the top the only place you can go is down. Audi and the Japanese brands are nipping at their heels, Mercedes is a very solid brand and the Koreans are rapidly moving upscale. Lexus in particular is very interested in developing a more sporty image and they have the engineering expertise to do so. Lexus beat BMW and Mercedes at their own game in the past (Lexus was the best selling luxury brand for years) and there is no reason to believe it can't happen again. If the posters here don't think it is a possibility I am sure that BMW is watching those brands very closely. BMW may have made a misstep or two along the way but they are are very well run company with very good resources and I am sure they are looking at the big picture and very far into the future. If the word on the street is that other brands are beating BMW at their own game I would expect that they will take immediate action to rectify the situation. They may or may not have reached their peak but I suspect they will remain a major player for a long time.
I can assure you that nobody at BMW is taking the attitude "BMW is no longer an enthusiast car" and I suspect that anyone who does will find him(her)self unemployed.
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Last edited by captainaudio; 01-04-2013 at 10:05 PM.