MUNICH -- In an effort to close a gaping chasm with segment leader Mercedes-Benz, BMW plans to expand its luxury product line to include a car above the 7 series that could poach customers from its rival's Maybach version of the S class.
"Just like certain competitors, we will see that we occupy with credible offers the price bracket of 150,000 euros ($170,000) and beyond," BMW development chief Klaus Froehlich said last week.
While BMW is attracted by the more lucrative margins that Mercedes earns on the Maybach versus its base S-class sedan, its future car would have to drive like a quintessential BMW.
Froehlich said his company wouldn't necessarily stretch the car another meter or two to achieve higher sales revenue.
"Some simply do 4 or 5 wheelbases [in length] and add varyingly thick chrome packages," he said. "That will not be the BMW approach."
BMW prides itself on the sporty genes that help the brand dominate the lower end of the market with nameplates such as the 3 series. But that can also act as a constraint. Wealthier car owners in the uppermost sedan segments are typically conservative and prefer stately comfort to the agile handling that BMW considers so crucial to its image.
About one of every two S-class models is sold in China, where driving dynamics play almost no role in purchasing decisions. Virtually all premium customers who buy the S class there have chauffeurs and traffic jams are frequent, eliminating any need for tight cornering, for example.
As a result BMW repositioned its 7-series flagship with the latest generation that launched in October, engineering a softer ride more like that of the S class. So far it has sold more than 9,000 units over about five months. Mercedes, by comparison, sold nearly 9,000 S-class units every month last year.
Nevertheless, even after shifting toward comfort, the brand remains exposed on the upper end of the range. The most expensive 7 series starts in Germany at around $126,000, and after that there is a big gap in the range until Rolls-Royce begins with the smaller Ghost/Wraith line.
This problem is heightened now that BMW's Rolls-Royce has declined in China largely as a result of a crackdown on corruption, which has prompted elites to eschew ostentatious shows of wealth for now.
By comparison, Mercedes has scooped up many of these former customers with a radically different strategy that at first was met with skepticism. In a move considered at the time to be an admission of failure, Mercedes exited the market for the superluxury cars in 2012, allowing Rolls and Volkswagen's Bentley to divvy up the customers between them.
Instead Mercedes took a different approach, resuscitating the then-defunct Maybach subbrand three years later in order to lend the name to a new exclusive family of top-of-the-line Mercedes cars. Starting with the Maybach S600 sedan, Mercedes has added the Maybach Pullman stretch limousine and is expected to eventually add a Maybach version of its GLS off-roader.
"The luxury class will remain a high-margin segment, so we intend to enhance our presence by adding another new model," BMW CEO Harald Krueger said last week.
BMW will be hoping to grab a piece of this market with what in some automotive press reports has been speculated as a 9-series Dreamliner.