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      04-09-2012, 07:56 AM   #1
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a few questions about BMW sales/marketing please!

I posted this on the non-m forum & got no respond, so I thought I should try it here too. Sorry if it's not appropriate.

What makes BMW decide to make bigger cars?
The safety standard? competitors? the demand?
How do they know consumers want bigger cars?
Whats wrong with keeping the same size & make the larger series more affordable & if someone wants a larger car, they can opt for a 5series?

Where do BMW's decision makers get the information of consumers out there want bigger cars?

I'm wondering about this just for my own, not meant to cause argument.

Please fill me in.
Thanks.
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      04-09-2012, 08:53 AM   #2
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It's primarily competition responding to demand. People tend to say they love a car but wish it had a tad more space/luxury/features, but since those people don't want the price and size bump associated with moving into a whole new series, BMW incrementally grows the series with each generation. Eventually when a given series is as large as the predecessors of the next higher series (like the new 3 being as large as older 5s, which are as large as older 7s), a new series is slotted in underneath to capture the price and size point that the existing series used to occupy -- the 1 is as large as older 3s. And round and round we go.

Bottom line: People always want a little bit more than what they have, so automakers give the people what they want.
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      04-09-2012, 09:08 AM   #3
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Quote:
Originally Posted by speedfan View Post
I posted this on the non-m forum & got no respond, so I thought I should try it here too. Sorry if it's not appropriate.

What makes BMW decide to make bigger cars?
The safety standard? competitors? the demand?
How do they know consumers want bigger cars?
Whats wrong with keeping the same size & make the larger series more affordable & if someone wants a larger car, they can opt for a 5series?

Where do BMW's decision makers get the information of consumers out there want bigger cars?

I'm wondering about this just for my own, not meant to cause argument.

Please fill me in.
Thanks.
Short answer: it's all about fuel economy requirements. The bigger the vehicles' footprint, the less fuel efficiency it is required to meet.


http://www.raremetalblog.com/2011/11...an-change.html
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      04-09-2012, 10:54 AM   #4
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Quote:
Originally Posted by jphughan View Post
It's primarily competition responding to demand. People tend to say they love a car but wish it had a tad more space/luxury/features, but since those people don't want the price and size bump associated with moving into a whole new series, BMW incrementally grows the series with each generation. Eventually when a given series is as large as the predecessors of the next higher series (like the new 3 being as large as older 5s, which are as large as older 7s), a new series is slotted in underneath to capture the price and size point that the existing series used to occupy -- the 1 is as large as older 3s. And round and round we go.

Bottom line: People always want a little bit more than what they have, so automakers give the people what they want.
thanks for your input!
By the way, if BMW makes the base 5series more affordable, then they meet all the requirement of more space/luxury/features do they ?!?!

Lets say BMW kept the same size & not chase after competitors.
Would they face a problem if BMW's customers prefers a C class because it is bigger than the 3series?

I don't think so because BMW could have that customer hooked in with its base 5series which isn't significant difference in price.
Quite obvious that a 5series is an upgrade to a 3series & C class isn't it.

Also, how would BMW know their customers want a larger car? Where do they get the info from?
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      04-09-2012, 10:57 AM   #5
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Quote:
Originally Posted by SamS View Post
Short answer: it's all about fuel economy requirements. The bigger the vehicles' footprint, the less fuel efficiency it is required to meet.


http://www.raremetalblog.com/2011/11...an-change.html
Then an affordable 5series would meet your requirement just fine isn't it.

I dont understand why they have to keep increasing the size of current series instead of introducing NEW series.
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      04-09-2012, 11:00 AM   #6
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Quote:
Originally Posted by speedfan View Post
Then an affordable 5series would meet your requirement just fine isn't it.
The "affordable" 5-series is called a 3-series.

Quote:
Originally Posted by speedfan View Post
I dont understand why they have to keep increasing the size of current series instead of introducing NEW series.
Uh, they do? 1-series, 2-series, X1, X4, Grand Coupe. What else are you looking for? If you need something much smaller, there's the entire Mini line....
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      04-09-2012, 11:05 AM   #7
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Quote:
Originally Posted by speedfan View Post
thanks for your input!
By the way, if BMW makes the base 5series more affordable, then they meet all the requirement of more space/luxury/features do they ?!?!

Lets say BMW kept the same size & not chase after competitors.
Would they face a problem if BMW's customers prefers a C class because it is bigger than the 3series?

I don't think so because BMW could have that customer hooked in with its base 5series which isn't significant difference in price.
Quite obvious that a 5series is an upgrade to a 3series & C class isn't it.

Also, how would BMW know their customers want a larger car? Where do they get the info from?
Making the 5 Series more affordable would require making it smaller, less luxurious, less powerful, etc, which isn't the greatest strategy if the competition is going in the opposite direction and satisfying more customers by doing so. Yes, a 5 is "better" than the 3 in those regards, but since the 3 is constantly improving, the 5 needs to do the same. There's a lot of technology in the current 3 that was reserved for the 5 or even the 7 not too long ago.

As for how they know, haven't you ever gotten contacted to take a survey about your car? I got contacted to take about 8 when I bought my M3, and for the most part I took them because they didn't take long. But what ends up happening is that like I said, people say they love their 3 Series, but they just wish it were a TINY bit larger, or had a COUPLE more tech/convenience features, or had SLIGHTLY more comfortable seats/suspension, etc. They don't want to make a jump as large as going straight to a 5, they just want a "better" 3 Series. So BMW makes incremental changes to the 3 that still make it pretty similar to the previous gen, but slightly more in line with customer demands. And since the other automakers are all doing this as well because they're hearing the same things, it would be bad for BMW to keep the 3 series as-is when Mercedes comes out with a new C Class that gives more people more of what they want.

I don't think people would cross shop a C Class with a 5 Series even if the size and even price were similar. But BMW wouldn't let that happen anyway because it would damage the brand perception of those lines. The 3 is a midsize sport car coupe/sedan, and the 5 is a larger luxury sedan, so BMW is doing what's necessary to keep those cars consistent with evolving expectations of what those terms mean; right now those definitions keep trending more upscale because people always want more. But someone who thought of themselves as a midsize sport sedan buyer (C Class) wouldn't be interested in a luxury sedan (5 Series), even if they happened to be the same size, because it's just a perception issue. So BMW would end up with a 5 that's neither cross-shopped with objectively similar cars nor consistent with what that type of car "should" be.

Yes, even now the equivalent Mercedes class tends to be more expensive than a BMW, but they also tend to be more luxurious (though not as sporty), so it depends on what your priorities are. But if people weren't saying they wanted a slightly bigger car, neither Mercedes nor BMW would be growing their cars slightly with each new generation.

Of course after doing incremental changes for several generations, the difference starts to add up, so an E92 is completely different from an E30. In fact the current 1 Series is probably much closer to the E30 on several metrics than the E92 is.
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      04-09-2012, 11:05 AM   #8
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Usually general public want more from their cars, like in China, they want more leg room on the back seats and thats the definition of luxury for them. That's why BMW developed the LI series for them (as far as I remember). I personally hope the new M3 is not any bigger than e92.
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      04-10-2012, 04:09 AM   #9
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Quote:
Originally Posted by SamS View Post
The "affordable" 5-series is called a 3-series.



Uh, they do? 1-series, 2-series, X1, X4, Grand Coupe. What else are you looking for? If you need something much smaller, there's the entire Mini line....

Quote:
Originally Posted by jphughan View Post
Making the 5 Series more affordable would require making it smaller, less luxurious, less powerful, etc, which isn't the greatest strategy if the competition is going in the opposite direction and satisfying more customers by doing so. Yes, a 5 is "better" than the 3 in those regards, but since the 3 is constantly improving, the 5 needs to do the same. There's a lot of technology in the current 3 that was reserved for the 5 or even the 7 not too long ago.

As for how they know, haven't you ever gotten contacted to take a survey about your car? I got contacted to take about 8 when I bought my M3, and for the most part I took them because they didn't take long. But what ends up happening is that like I said, people say they love their 3 Series, but they just wish it were a TINY bit larger, or had a COUPLE more tech/convenience features, or had SLIGHTLY more comfortable seats/suspension, etc. They don't want to make a jump as large as going straight to a 5, they just want a "better" 3 Series. So BMW makes incremental changes to the 3 that still make it pretty similar to the previous gen, but slightly more in line with customer demands. And since the other automakers are all doing this as well because they're hearing the same things, it would be bad for BMW to keep the 3 series as-is when Mercedes comes out with a new C Class that gives more people more of what they want.

I don't think people would cross shop a C Class with a 5 Series even if the size and even price were similar. But BMW wouldn't let that happen anyway because it would damage the brand perception of those lines. The 3 is a midsize sport car coupe/sedan, and the 5 is a larger luxury sedan, so BMW is doing what's necessary to keep those cars consistent with evolving expectations of what those terms mean; right now those definitions keep trending more upscale because people always want more. But someone who thought of themselves as a midsize sport sedan buyer (C Class) wouldn't be interested in a luxury sedan (5 Series), even if they happened to be the same size, because it's just a perception issue. So BMW would end up with a 5 that's neither cross-shopped with objectively similar cars nor consistent with what that type of car "should" be.

Yes, even now the equivalent Mercedes class tends to be more expensive than a BMW, but they also tend to be more luxurious (though not as sporty), so it depends on what your priorities are. But if people weren't saying they wanted a slightly bigger car, neither Mercedes nor BMW would be growing their cars slightly with each new generation.

Of course after doing incremental changes for several generations, the difference starts to add up, so an E92 is completely different from an E30. In fact the current 1 Series is probably much closer to the E30 on several metrics than the E92 is.
Quote:
Originally Posted by Prince_of_Persia View Post
Usually general public want more from their cars, like in China, they want more leg room on the back seats and thats the definition of luxury for them. That's why BMW developed the LI series for them (as far as I remember). I personally hope the new M3 is not any bigger than e92.
Very well put jphughan.
I didnt buy my car new, so I didnt get contacted for the survey. So, I see where they get the info from.

Prince of Persia, You're right. But I see no point in making the 3series LI at all.
There are 520i, 523i. I think the US only get 528i ?!?!

I'm fixed with the ideal that if BMW could make a base 520i's price as affordable as a loaded 3series, that would be the best of both worlds for enthusiast group & people mover group, wouldn't it?
1 group could have their 3series small, light, agile.
The other group could have an upgrade from 3series.

Im sure if the Chinese/Asian buyers (who notoriously prefer the Image) could get themselves into a 5series, instead of 3series, they would do it in a heart beat.
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      04-10-2012, 07:34 AM   #10
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What makes BMW decide to make bigger cars? research, consumer demand, profit, profit

The safety standard? No, unless safety sells (at one time it was higher up in what consumer's wanted, but the perception today is all cars are volvo safe)

competitors? In some sense, as all car makers watch and spy on the competitors. Cross shoppers are who they target. For BMW its Audi, Mercedes, Jag

the demand? Of course. For example, read Roundel and you here screams for a cheap bmw or a hatchback bmw, but right or wrong, BMW's own market research says that they can't sell enough to make it worthwhile


How do they know consumers want bigger cars? Consumers always want bigger cars (except for brief fuel economy spurts). In the old days GM had slots, chevy to olds to buick to caddy, bigger, fancier more expensive. Bigger cars look better, drive nicer and impress the neighbor.

Whats wrong with keeping the same size & make the larger series more affordable & if someone wants a larger car, they can opt for a 5series? Because you make more money selling a 40k car then you do a low content smaller 25k car, and if demand is equal or greater for the 40k car you move in tat direction. plus it allows you to slot in a 25k car if the demand is there. yet BMW sells more 3s than 1s. Also, the price may seem higher from 1985, but with inflation, a 1985 325 is almost the same as a 328 today.
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      04-10-2012, 07:43 AM   #11
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Quote:
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What makes BMW decide to make bigger cars? research, consumer demand, profit, profit
You forgot CAFE regulations. See post #3.
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      04-10-2012, 08:41 AM   #12
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Quote:
Originally Posted by speedfan View Post
What makes BMW decide to make bigger cars?
The safety standard? competitors? the demand?
How do they know consumers want bigger cars?
Consumers are also getting larger and fatter and can't fit in smaller cars.
.
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      04-10-2012, 09:06 AM   #13
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Quote:
Originally Posted by mjposner View Post
What makes BMW decide to make bigger cars? research, consumer demand, profit, profit

The safety standard? No, unless safety sells (at one time it was higher up in what consumer's wanted, but the perception today is all cars are volvo safe)

competitors? In some sense, as all car makers watch and spy on the competitors. Cross shoppers are who they target. For BMW its Audi, Mercedes, Jag

the demand? Of course. For example, read Roundel and you here screams for a cheap bmw or a hatchback bmw, but right or wrong, BMW's own market research says that they can't sell enough to make it worthwhile


How do they know consumers want bigger cars? Consumers always want bigger cars (except for brief fuel economy spurts). In the old days GM had slots, chevy to olds to buick to caddy, bigger, fancier more expensive. Bigger cars look better, drive nicer and impress the neighbor.

Whats wrong with keeping the same size & make the larger series more affordable & if someone wants a larger car, they can opt for a 5series? Because you make more money selling a 40k car then you do a low content smaller 25k car, and if demand is equal or greater for the 40k car you move in tat direction. plus it allows you to slot in a 25k car if the demand is there. yet BMW sells more 3s than 1s. Also, the price may seem higher from 1985, but with inflation, a 1985 325 is almost the same as a 328 today.
I think it starts to make sense to look at it from profit margin point of view, since 3series has always been BMW's bread & butter.
Thanks.

Quote:
Originally Posted by SamS View Post
You forgot CAFE regulations. See post #3.
I re-read the CAFE standards & I dont get this part on 3rd paragraph, first sentence "To meet the new standards, cars and vans will become smaller and lighter, with heavy emphasis on electric vehicles and hybrids."
So, all car manufactures are violating CAFE Standard now?
sorry if this gets you annoyed.
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      04-10-2012, 09:07 AM   #14
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Quote:
Originally Posted by James T. Kirk View Post
Consumers are also getting larger and fatter and can't fit in smaller cars.
.
hahahah. That too.
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      04-10-2012, 09:13 AM   #15
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so what, E30 is the standard for a small light car? I tell you right now, I would not want to sit in a E30 if I were involved in a crash.

Not when my knees will be the cumple zones.

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      04-10-2012, 09:15 AM   #16
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99% buyers are NOT performance oriented buyers

Bingo! We have a winner!

Everything we all care about our M cars is completely lost on the average Joe.
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      04-10-2012, 09:17 AM   #17
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Quote:
Originally Posted by speedfan View Post
I re-read the CAFE standards & I dont get this part on 3rd paragraph, first sentence "To meet the new standards, cars and vans will become smaller and lighter, with heavy emphasis on electric vehicles and hybrids."
So, all car manufactures are violating CAFE Standard now?
sorry if this gets you annoyed.
Why would I be annoyed? I am not the one misinterpreting CAFE. Your quote above about "smaller and lighter" is a generalization, one that does not apply to the question related to BMW's increasing footprint.

It is very simple:

Quote:
Starting in 2011 the CAFE standards are newly expressed as mathematical functions depending on vehicle "footprint", a measure of vehicle size determined by multiplying the vehicle’s wheelbase by its average track width. [3] CAFE footprint requirements are set up such that a vehicle with a bigger footprint has a lower fuel economy requirement than a vehicle with a smaller footprint.
http://en.wikipedia.org/wiki/Corpora...e_Fuel_Economy
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      04-10-2012, 09:28 AM   #18
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Quote:
Originally Posted by SamS View Post
Why would I be annoyed? I am not the one misinterpreting CAFE. Your quote above about "smaller and lighter" is a generalization, one that does not apply to the question related to BMW's increasing footprint.

It is very simple:



http://en.wikipedia.org/wiki/Corpora...e_Fuel_Economy
heheh well, because you gave me the answer in post 3 & here I'm still asking you about that, so just worry if you were annoyed. if you're not. Great.

Anyways, my understanding is that increasing the footprint meaning stretching the wheel base. Correct? if so, in order words, CAFE standards means increasing the wheel base, lighter the weight, more fuel efficiency, but not increasing the size & weight.
Yet cars are getting bigger & heavier.
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      04-10-2012, 10:09 AM   #19
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Quote:
Originally Posted by speedfan View Post
h
Anyways, my understanding is that increasing the footprint meaning stretching the wheel base. Correct? if so, in order words, CAFE standards means increasing the wheel base, lighter the weight, more fuel efficiency, but not increasing the size & weight.
Yet cars are getting bigger & heavier.
No, you are still misinterpreting the standards. The bigger the footprint (wheel base x track width), the less fuel efficient the vehicle needs to be. For example, a 7-series is bigger than a 1-series, so the 7-series is not required to get the same MPG as a 1-series.

And the basis of CAFE is an average. So if BMW sells a ton of 3-series, they can make it bigger (thereby lowering the fuel economy it is required to get), to balance out the relatively poor economy of X5/X6/etc.

It is simple math: lower the fuel economy requirements of your highest-volume vehicle by making it bigger. Then you can more easily achieve your fleet mpg target.

I can appreciate all the speculation in this thread about why the cars are getting bigger due to fat people, etc. But it really comes down to CAFE requirements, end of story.
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      04-10-2012, 10:32 AM   #20
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Quote:
Originally Posted by SamS View Post
No, you are still misinterpreting the standards. The bigger the footprint (wheel base x track width), the less fuel efficient the vehicle needs to be. For example, a 7-series is bigger than a 1-series, so the 7-series is not required to get the same MPG as a 1-series.

And the basis of CAFE is an average. So if BMW sells a ton of 3-series, they can make it bigger (thereby lowering the fuel economy it is required to get), to balance out the relatively poor economy of X5/X6/etc.

It is simple math: lower the fuel economy requirements of your highest-volume vehicle by making it bigger. Then you can more easily achieve your fleet mpg target.

I can appreciate all the speculation in this thread about why the cars are getting bigger due to fat people, etc. But it really comes down to CAFE requirements, end of story.
yup, I got the fleet mpg target.
Thanks Sam.
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      04-10-2012, 10:57 AM   #21
hks786
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I hear you. I think the new A4/F30 are quite big. I prefer B7 A4/E46 proportions. That's why Audi are now making an A3 sedan because the A4 has grown so much.

BTW your E90 is really nice. I'm not a big E90 fan but yours is clean. Love the angel eyes and bodywork is perfect.
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      04-10-2012, 12:03 PM   #22
speedfan
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Quote:
Originally Posted by hks786 View Post
I hear you. I think the new A4/F30 are quite big. I prefer B7 A4/E46 proportions. That's why Audi are now making an A3 sedan because the A4 has grown so much.

BTW your E90 is really nice. I'm not a big E90 fan but yours is clean. Love the angel eyes and bodywork is perfect.
Yess! to me, the size e46 m3 is perfection.

Ohh, THANKS for your compliment :-)
Cheers.
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