High hopes on small SAV

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RICHMOND HILL, ONT. – For a small SAV, BMW’s new X1 certainly has some heavy hopes on its shoulders.

The new premium vehicle officially hit markets in mid-April and experienced its first full month of sales in Canada in May. But beyond the sales numbers, the story for BMW is from where those customers are coming.

“It is no surprise that the X1 will be a strong conquest vehicle for us,” explained Stephen McDonnell, director for sales at BMW Canada. “I would anticipate a minimum of 60 per cent of the sales would likely come from other brands. Forty per cent would probably be within the BMW family, with some coming from the X3 or moving up from the 3 Series.”

McDonnell also acknowledged the X1 lets BMW look beyond conquests from other premium brands. He pointed to the price ($38,500), saying if customers factor in strong residual values and four-years/80,000 km no charge scheduled maintanence, the X1 could bridge that all-important gap to non-premium brand shoppers, too.

“If customers consider all of that, the actual transaction cost approaches less expensive options.”

BMW says the X1 does not have a “direct” competitor because of its size and MSRP. Jeremy Chiu, product planning manager, said some cross shopping would likely include the Acura RDX, Volkswagen Tiguan, Toyota RAV and Infiniti EX.

“We feel the X1 is really well positioned for the Canadian marketing considering the fuel efficiency, price and features,” he said.

McDonnell said the new model expected to account for 10 to 12 per cent of BMW Canada’s annual sales this year and roughly 25 per cent of X family sales [X1, X3, X5 and X6].

When asked if those lofty volume hopes would just cannibalize X3 sales, he said there was “no doubt” they would see some X3 customers moving to the X1. “But that’s not a bad thing because we don’t have enough X3s to go around,” he added.

BMW also hoped new offerings like the X1 and MINI Countryman would help it regain its spot at the top of Canada’s premium heap after being edged out by Mercedes-Benz in 2010.

McDonnell expects to see 2011 close out with another record year of sales – making it 21 years in a row – and that said the automaker stands a “very good chance” of regaining the premium crown this year.

“It’s no surprise that everything in the car business is product driven. And as your product ages, it has an impact on the volume of cars you can sell.”