5 Series (F10) BMW 5GT sales disappointing, has execs rethinking 5 Series Touring

[EnI]

I'm gonna try to inform & "educate" you again. But ... if you want to believe the Earth is flat, that's your problem.

Do we know WHY 5erGT is selling badly in US? Is it the concept? Is it the price? Is it the shape? Is it the styling? Etc ...

As said many times (by BMW official, by Scott, by me, by media etc) , also at model's launch: 5erGT was introduced mostly for Euro and some Asian markets as an anti-SUV & alter-limo. US wasn't identified as a key market for 5erGT. Never!

It's not a secret US market isn't a very welcome place for hatchbacks in general. Nor is for the wagons. So I have no idea where the 4000-8000 unit sales plan for the 5erGT came from. Way too optimistic. I've seen it for the first time! (And what a range! WOW 100% difference between the extremes! That's a very precise plan indeed. Not. ) The AG plan I heard of was only to sell about 10-12% of all 5erGTs in the US market. That makes it 2500-3000 units per year. Not 4000-8000. Really, where the heck did this number come from?! Btw, BMW sell about 40k 5ers per year in US market.

Sure BMW will address the issue next time, be sure - to make the car a bit more universally appealing, just like they did with the new 7er or other models: since E65 was selling like hot cakes in some markets, while in other markets they could barely move it. But was it a flop? Not at all. But that doesn't mean things can be executed better next time. Eg. F01 is much more universally appealing: inside & outside. And as you can see main issues are usually addressed in the next Mk - especially when it's only Mk2, a second attempt.

Regarding 5erGT latest global sales - although the sales were up 39.9% in the 1Q 2011 (6,271 vs 4,484; compared to 1Q 2010) the share of 5erGT sales within all 5er family sales shrank to "just" 7.3% (the annual plan has been to keep it around 10%).

Since nobody has done it, I'll do it for you ... again:

BMW niche model sales figures

1Q 2011 sales ... 2010 annual sales

5-series GT: 6,271 ... 26,486
1er 3-door: 5,636 ... 31,980
1er coupe: 5,544 ... 26,191
1er cabrio: 4,799 ... 24,803
3er coupe: 9,618 ... 46,358
3er cabrio: 7,325 ... 35,812
Z4 roadster: 4,514 ... 24,575
X6 SAC: 9,715 ... 46,404
6er (both): 789 ... 5,848

Source: BMW AG

So, compared to other niche vehicles the 5erGT sales are not bad at all, actually they are very good - regarding the price & size.
Although X6 is the winner here without a doubt.

Then ... if 5erGT is a fail in your opinion, than 1er coupe, 1er cabrio, Z4 (not to mention the both 6ers) are even bigger fails - according to sales figures.

PS:

Just to make a 1Q 2011 sales comparison between the key rivals* in this segment (*according to some automotive media - since all 3 are luxury hatchbacks) ...

1Q 2011 global sales:

5-series GT: 6,271
A7 Sportback: 5,818
Panamera: 4,715

Sources: BMW, Audi, Porsche

A failure? A dead thing?
Hate the looks, hate the concept ... But calling it a (business or sales) failure is just ignorant & a poor intellectual call.

Numbers not factual enough for you guys? That's as scientific as it gets ...

 

[K-A]

Eg. to me the W212 E-class look hideous, to you it looks phenomenal & gorgeous. Go figure!

Should I say that IMO W212 drivers / owners have bad taste? Should I? Or perhaps that's a bit to arrogant & pretentious after all ... What about diversity & plurality (of choices)? Yes, it feels good throwing dirt, doesn't it?

(Should I put some smiley here?)

How could I have guessed, a BMW fan pointing out their "distaste" for my E-Class when I'm bashing a random Bimmer. The fact that some of you guys actually stand by this car so vigorously is hilarious. And yes, I understand some genuinely will like the car (Human for example, I respect your tastes and persona, and we obviously have genuinely different tastes in some cars, but I'd hope car talk here wouldn't ever get taken offensively.... Unless someone hits you up and says "YOUR CAR IS UGLY! YOU HAVE BAD TASTE!" just to make you feel bad, etc.)

The reason your statement has no relevance is because: A- The W212 is a sales gorilla, in fact, the only thing about this car that I don't like is the fact that too many people are eager to cut checks for them. I'll bet BMW couldn't GIVE away as many 5 GT's as M-B sells E-Classes.

B- The E-Class is meant to be a striking example of a timeless, understated, and tried/true form, while the 5GT is meant to be an "innovative", "look-at-me" pretentious eye sore (well, "eye sore" is certainly what they weren't going after). It's hard to say that the E-Class is as offensive a design as the 5 GT is, even if you hate the E-Class.

I love quirkiness and innovation in all forms of life: Looks, personalities, music, movies, art, literature, etc. etc. However, when it comes to cars, for some reason I get far more conservative, and I'll proudly stand by what I feel is in good taste (and discredit what I feel is in bad taste in Car Forums), therefore, I am on the cheering team for the failure of the 5 GT, and trust that BMW will learn from it and come out stronger. And here's my smiley "" !

 

[Guibo]

I have no idea where the 4000-8000 unit sales plan for the 5erGT came from. Way too optimistic. I've seen it for the first time! (And what a range! WOW 100% difference between the extremes! That's a very precise plan indeed. Not. )

I think that question forms the crux of this discussion: the source and veracity of that sales plan are paramount in determining whether this car is a flop in the US.
It was noted long ago that this car wasn't intended primarily at the US market at all. From Car & Driver's early drive impression last year:
"This may be hard to accept, but what you see here is a BMW that’s not really conceived to please Bimmer loyalists in the U.S. That’s because this inflated version of the 5-series sedan is aimed at expanding markets where vehicle priorities differ from our own. China, for one."
2010 BMW 550i Gran Turismo - Short Take Road Test - Auto Reviews - Car and Driver

However, your worldwide sales figures data suggests that the 5er GT is running 27% below expectations, as a percentage of overall 5er sales. That can only be seen as a disappointment regardless of those sales figures against competitors (as those competitors may have had modest sales goals to begin with).

And yeah, I hardly ever see these things. I've seen it maybe 4 times; once at an auto show, once on the road. The other two were on sales display at Costco (which also sells the 1er and Boxster).

 

[K-A]

I heard that the X6 is selling below expectations in the U.S. Is that true?

 

[EnI]

I heard that the X6 is selling below expectations in the U.S. Is that true?

Yes.

The plan was to sell 40k X6s annually worldwide, and 50% of them in the in US market, which was identified as a key market for X6.

So the plan was to sell about 20k X6s per year in USA. Yet BMW sold only 6,257 units of X6 in US last year. So, way below planned 20k units.

While globally BMW was able to sell 46,404 X6s in 2010 - that's 16% above initial plan of 40k units. 1Q 2011 global sales are still strong, but 10% down (some people waiting for April premiere of 3-seat rear bench).

It was reported by BMWNA that about 70% of potential X6 customers in US didn't decide for the purchase due to the fact only 2 separate seats were available in the rear, and no 3-seat bench. That issue was addressed with revised MY2012 model - so 3-seat rear bench is now optional (from April 2011 on) - which eg resulted in 36.3% sales increase for X6 in April in US market Compared to April 2010 sales (383 units), or even 89% increase compared to March 2011 X6 US sales (522 vs 278 units)!

 

[EnI]

However, your worldwide sales figures data suggests that the 5er GT is running 27% below expectations, as a percentage of overall 5er sales. That can only be seen as a disappointment regardless of those sales figures against competitors (as those competitors may have had modest sales goals to begin with).

Yes, in 1Q 2011 5er sales figures the GT sales represent only 7.3% of all 5er sales.

But the explained & set BMW sales plans are set as ANNUAL PLANS, not qurterly or monthly plans. I guess you know that annual plan isn't achieved proportionally every month - some months are over the plan, some plans are under the plan. Not that every month or every quarter the annual plan has to be met proportionally. Have heard of a season factor already?

Also: presented annual plans only applies to full production years (so, the years when the models is introduced and phased out are excluded, of course).

We will see at the end of the year whether the plans were realized, and goals were achieved.

But sure 5erGT isn't a positive sales surprise like X6 or X1 are - where demand was higher than planned. It's doing "just" OK.



Btw, what are Audi's & Porsche's annual sales goals for A7 & Panamera? Anybody knows?

 

[Mr. Mercedes]

Eni thank you for putting things into perspective with the sales data. I guess the 5GT is performing poorly in some markets but very well in others but overall broadly in line with BMWs expectations. Given the high price, and probably margins, this can only be a good thing. It's not Likely to be scrapped any time soon.

I wonder how it compares to the R. I still haven't come across a model by model breakdown for MBs 2010 sales. They are conspicuously absent from the annual reports.

 

[K-A]

I might take back my comment about taking the R over the 5 GT. Maybe I'd take the 5 GT. That's a tough one, for all the wrong reasons, lol. Anybody have side by side pics of the two?

 

[EnI]

Gathering, reading & analyzing all data, I've found out that BMWNA sets quite unrealistic sales goals for particular new models. Makes me wonder about the ability & sanity of its management & marketing department.

20,000 X6s per year, up to 8,000 5er GTs per year ...

And it makes me wonder what their sales planes for X1, 6er GC, 3er GT will be etc

Not to mention current BMWNA CEO thinks EVs are not a great solution - and he had to officially take the words back since his personal opinion contradicts BMW AG policy on EV.

And that back then when BMW was developing the new MINI the officials from BMWNA were convinced MINI won't succeed in USA, and would fail there sales wise. Really?

It makes me think BMWNA don't know it's own market very well.

 

[Monster]

Yes.

The plan was to sell 40k X6s annually worldwide, and 50% of them in the in US market, which was identified as a key market for X6.

So the plan was to sell about 20k X6s per year in USA. Yet BMW sold only 6,257 units of X6 in US last year. So, way below planned 20k units.

While globally BMW was able to sell 46,404 X6s in 2010 - that's 16% above initial plan of 40k units. 1Q 2011 global sales are still strong, but 10% down (some people waiting for April premiere of 3-seat rear bench).

It was reported by BMWNA that about 70% of potential X6 customers in US didn't decide for the purchase due to the fact only 2 separate seats were available in the rear, and no 3-seat bench. That issue was addressed with revised MY2012 model - so 3-seat rear bench is now optional (from April 2011 on) - which eg resulted in 36.3% sales increase for X6 in April in US market Compared to April 2010 sales (383 units), or even 89% increase compared to March 2011 X6 US sales (522 vs 278 units)!

I have 2 questions about this, firstly, those potential X6 buyers who ruled out the vehicle because it didn't have 3 seats at the back, did they go straight to the X5 or they end up buying something else? This leads to my second question, now that the 3 seat rear bench is available for the X6, how much of the increased sales of the X6 are at the expense of the X5?

 

[EnI]

I wonder how it compares to the R. I still haven't come across a model by model breakdown for MBs 2010 sales. They are conspicuously absent from the annual reports.

No global sales figures, but we can only compare US sales:

Jan-Dec 2010:
5er GT: 2,848
R-class: 2,937 (2,825 in 2009; the best year was 2006 with 18,168 units sold)

Jan-Apr 2011:
5er GT: 720
R-class: 870

And Daimler claims US is the main market for R-class ...
They had an initial plan of selling 50,000 units per year, half of them (25k) in USA. Neither of two goals have ever been met.

 

[LaArtist]

^Amazing that it still sells more in the US despite being almost a WHOLE genaration older..

 

[EnI]

I have 2 questions about this, firstly, those potential X6 buyers who ruled out the vehicle because it didn't have 3 seats at the back, did they go straight to the X5 or they end up buying something else?

They've never given info on that.

This leads to my second question, now that the 3 seat rear bench is available for the X6, how much of the increased sales of the X6 are at the expense of the X5?

No info yet since the sales of X6 with rear bench only started in April.

But when looking at drop in X5 annual sales after X6 was introduced it's obvious some cannibalizing is going on - but there was also X5 LCI in progress, new rivals launched etc ... so it's hard to tell how much X6 introduction contributed to X5 sales drop.

 

[EnI]

^Amazing that it still sells more in the US despite being almost a WHOLE genaration older..

I'm not sure they are direct rivals. Do you think they are?

One is a luxury hatch with higher sitting position, the other is a luxury MPV / van. R-class is still much more practical & versatile vehicle, and more than 10cm (4") higher than 5er GT.

5er GT is rival to everyone & to nobody at the same time. Some compare it to R-class, some to CLS / A7 / Panamera. Some say it's 7er hatch/wagon.



I'm not sure it's much cross-shopping between 5erGT & R-class when specific needs are in question. Since they are much too different vehicles.

 

[EnI]

I might take back my comment about taking the R over the 5 GT. Anybody have side by side pics of the two?

Nope. But it's much more similar in the concept to Panamera anyway (large coupeish hatch) - ex. the higher roof / sitting position. Mind the 5erGT is 10.4cm (4.1") LOWER than R-class.

 

[LaArtist]

I'm not sure they are direct rivals. Do you think they are?

One is a luxury hatch with higher sitting position, the other is a luxury MPV / van. R-class is still much more practical & versatile vehicle, and more than 10cm (4") higher than 5er GT.

5er GT is rival to everyone & to nobody at the same time. Some compare it to R-class, some to CLS / A7 / Panamera. Some say it's 7er hatch/wagon.



I'm not sure it's much cross-shopping between 5erGT & R-class when specific needs are in question. Since they are much too different vehicles.

Yep its a Van..like the R
And to compare it to panamera and CLS is just stupid..
Why would they green light the 5er grancoupe then..

This is BMW´s R class..no discussion about that..

Maybe its a size smaller..but it sure as hell is a van..like the R

 

[EnI]

Maybe its a size smaller..but it sure as hell is a van..like the R

Really?

 

[LaArtist]

Yes sir..they looks like cousins..
The GT just has a hatchback so it has a more sloping roofline..
But they are very similar to me..

 

[SCOTT27]

The issue which some people still not accept is that BMW is a global company and it's products must appeal to customers around the globe.
It is no longer about the specific market it is about competing globally in a changing world. Some BMW's might not work in some markets but they are working in others and in some cases niche products are more acceptable in specific markets that are growing for BMW.

If you look at China for example. BMW did not exist in that market at the level they are growing in China. For BMW China is now their third biggest market ahead of the US and Germany. M sales in China have grown by 355% in the past year a significant leap and the reason why BMW brought the M5 Concept to Shanghai.
Amongst other new developing markets BMW are seeing demand for it's "unorthodox" niche products from include, India , Brazil and Russia.

It's a process every manufacturer goes through. One market might not take to the product but several others do in it's place.
If you consider Maybach. Increased sales in China have kept the brand on life-support whilst Daimler decide how to capitalize on the brands future.

And the X6? There will be a second generation X6.

By the end of the year we hope to be close to delivering the 200,000 X6.
Not bad from a projection of around 40,000 sales in two years, actually selling three times as much units as the initial projected target. Again the car has proved popular in emerging markets.

Which is why you are now reading about future Q6 from Audi and GLC from Mercedes-Benz.

 

[martinbo]

No, in this instance I will disagree Artist. The R-Class is a three-row six seater whereas the 5er GT is more conventional in its seating arrangment. The R-Class is distinctly more MPV in theme and accommodation.