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February 3, 2013

Little X1 gives BMW more room to grow

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.

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