The fundamentals of business can be bluntly simple, like, to make more money, sell more product.
But some finer points become tough. Like, how do you sell more product if you’re a luxury brand that needs to also stay somewhat exclusive? After all, one big reason people buy luxury goods is for the prestige of owning an item most other people can’t afford. If you sell, say, luxury cars, you can’t expect your cars to remain exclusive and prestigious if they become as commonplace as Chevys and Fords.
The German auto brand BMW beats that dilemma by expanding its lineup with new types of automobiles. It sells more cars by introducing different types of cars. Those new types make BMWs appeal to new groups of people that BMW couldn’t reach before, enabling the company to sell more vehicles without diluting the models already out there.
That’s happening right now with the new BMW X1. Starting at $31,695 (or $33,395 when equipped with all-wheel drive), the four-door, five-passenger wagon brings the manufacturer into a whole new auto segment. The X1 is a compact crossover, or a smaller scale, car-like sport-utility vehicle. About 12 or 18 years ago we would have called it a station wagon, but that was before car makers united wagons and SUVs in matrimony, creating the crossover class of high-riding wagons with elevated seats and all-wheel drive.
BMW sells two other crossover wagons that preceded the X1. The BMW X3 is a step up in size, introduced as a 2004 model and currently starting at $39,745. Larger yet, the BMW X5 arrived as a 2000 model. The current, 2013 version starts at $48,395.
The X1 is brand new, introduced at the start of the 2013 model year in the fall. Because it is smaller and less expensive than the X3 and X5, the X1 opens BMW to a whole new class of drivers, which can help the company sell more products.
From what Emily Gallagher sees at Tulley BMW in Nashua, N.H., that’s exactly how it’s working out.
“The response has been great. It’s going over very well,” she said. “It’s exceeding our expectations.”
Models are selling quickly when they arrive at Tulley from BMW, with a line forming for buyers who can’t get one at once.
“We have a lot of orders for them,” affirmed Gallagher, who is new-car sales manager at Tulley in Nashua. Tulley also operates a BMW dealership in Manchester, N.H.
Some of its appeal comes from the higher fuel economy available in the smaller model, she explained. Although you can purchase an X1 with rear-wheel drive, most sold at Tulley feature BMW’s xDrive all-wheel drive – because of seasons like the current one, when you can count on slick roads. When equipped with four-wheel traction, X1 earns an EPA fuel-economy rating of 22 miles per gallon in city driving, 33 mpg on the highway. (Premium gasoline is required).
Another appealing aspect is that the X1 is, after all, a BMW. The Germany-based car company is a high-flying luxury brand with an identity that many consumers want. BMW carefully cultivates an image of sporty, athletic motoring and skillful, in-command driving.
The nice part is, that’s not just a show. The auto maker also is careful to live up its image, crafting road prowess into its cars and supplying precisely engineered, skillfully assembled vehicles that are taught, quick, and dramatically styled.
The new X1 is all those things. On the ground, rather than compact, it looks sinuous, elongated and elegantly swept. High-grade materials line the cabin. They give a sturdy, yet sumptuous finish to the interior designed with swept, flowing surfaces and artfully shaped panels. But for all that, the X1’s wide-opening wagon back makes it a versatile hauler for its tidy footprint. Roof rails equip it to carry more ambitious loads, like outdoor adventure gear. Other features of the X1 include automatic climate control, fog lamps, heated outside mirrors, LED taillights, chrome tailpipe tips, a premium, multi-functional entertainment system, leather-wrapped steering wheel with fingertip control buttons, rain-sensing wipers and automatic headlights.
The standard model X1 is well powered, with a four-cylinder engine aided by turbocharging that boosts output to 240 horsepower. Also available, a 3.0-liter in-line six-cylinder engine with turbocharger produces 300 horsepower. Both engines attach to an eight-speed automatic transmission that switches gears with whispering effectiveness.
Such qualities make the X1 a tempting package. As Emily Gallagher of Tulley summed it up, “it’s a BMW, but it starts under $35,000.”
The model is bringing new people into the dealership, she reported. Many of them are not prior luxury-car owners, but represent expanding business for BMW. Some of the trade-ins Gallagher has seen include the Subaru Outback all-terrain wagon, the expedition-ready Toyota FJ Cruiser, the Toyota Highlander SUV and the Honda CR-V, a popular mass-market compact crossover.
For their trades, such buyers get a prestigious and more exclusive automobile. BMW gets new business, selling more products while it retains its prestigious and exclusive aura.
Jeffrey Zygmont is an author of fiction and nonfiction books, and a long-time auto writer. Contact him at www.jeffreyzygmont.com.
2013 BMW X1 Vehicle type: 4-door, 5-passenger, rear- and all-wheel-drive compact crossover wagon Price range: $31,695 to $39,495 (plus options) Warranty: 4 years/50,000 miles basic warranty; 4 years/50,000 miles powertrain warranty; 12 years/unlimited miles corrosion warranty; 4 years/unlimited miles roadside assistance; 4 years/50,000 miles free scheduled maintenance Engine: 2.0-liter turbocharged I4 Power: 241 horsepower at 5,000 rpm; 258 lb.-ft. torque at 1250 rpm Transmission: 8-speed automatic Fuel economy: 24 mpg city; 34 mpg highway Wheelbase: 111 inches Length: 176 inches Width: 71 inches Height: 61 inches Weight: 3,527 pounds Fuel capacity: 16.6 gallons Turning circle: 38.8 feet