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BMW aims duo of new SUVs squarely at Mercedes’ US luxury lead

Bernhard Kuhnt, Head of BMW Group Region Americas, introduces the 2018 BMW X2 Sport Activity Coupe at the North American International Auto Show in Detroit January 15, 2018. — Reuters picBernhard Kuhnt, Head of BMW Group Region Americas, introduces the 2018 BMW X2 Sport Activity Coupe at the North American International Auto Show in Detroit January 15, 2018. — Reuters picMUNICH, Feb 2 — BMW AG, smarting from its loss to Mercedes-Benz in the US luxury market for two years running, is padding its arsenal of sport utility vehicles in a push to regain the sales crown.

It has a long road ahead. Even though sales at BMW rose 5 per cent in January led by its 3 Series sedan, it wasn’t enough to match Mercedes’s healthy lead just one month into the new year.

Daimler AG’s Mercedes first seized the US luxury crown in 2016 by adding more SUVs to its lineup, like the compact GLA crossover, as low gas prices and rock-bottom interest rates fuelled America’s big-vehicle fever. BMW’s now playing catch up, with two new utility models and several refreshes planned for the US market this year.

BMW showed off its coupe-like crossover X2 at the Detroit auto show to meet small-SUV demands and will fill a hole at the other side of the spectrum with its full-sized X7 at the end of the year.

“The X2, other than just being a cool SUV, it’s also a brand-new vehicle, completely new segment, which we believe could have a lot of conquest,” Bernhard Kuhnt, chief executive officer of BMW’s North American operations, said in an interview at the Detroit show. “We were lagging behind in the mix.”

In 2017, BMW’s mix of SUVs was in the low 40 per cent range, while the luxury market was closer to 55 per cent, said Kuhnt, who took over as CEO last year.

Even in a flat luxury market, BMW has room to grow because SUVs will continue to take share from passenger cars this year, said Jessica Caldwell, executive director of industry analysis at Edmunds.

“The X2 is a good addition to the portfolio,” she said. “These SUVs that are smaller are priced more friendly to the average consumer.”

Smaller luxury players again saw outsize growth last month on the back of their SUV offerings. Volkswagen AG’s Audi saw sales rise 9.9 per cent to 14,511 units, led by its Q5 and Q7 SUVs. Deliveries at Toyota Motor Corp.’s Lexus — which lost its No. 2 spot to BMW last year by a mere 553 cars — jumped 15 per cent to 17,914, buoyed by NX and RX crossovers. — Bloomberg

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