BMW Rolling Out New 7-Series
It has gained a lot of ground in recent years after a long history of trailing other brands in the U.S. luxury-car market, and now, with the newly redesigned flagship 7-Series sedans it unveiled to the world last week, Bayerische Motoren Werke is hoping to gain momentum that will make it the champion.
The auto maker, one of the last of the independent major manufacturers, craves the high profit margins the 7-Series will bring. The company also hopes to generate a “halo” effect with its top-of-the-line model in attracting more customers to showrooms at a time of intense competition in the luxury sector.
Through August, BMW was running a close second to Toyota Motor Corp.’s Lexus among best-selling luxury brands in the U.S. market.
Lexus sold 147,552 cars and trucks in the first eight months of the year, up 11.3% from the same period last year. That was just a nose ahead of BMW, which sold 145,357 vehicles, up a whopping 20.4% amid a slowing U.S. economy in which overall vehicle sales shrank 4.9%.
BMW unveiled the 7-Series cars Sept. 11 at the biennial Frankfurt International Motor Show just before news arrived of that morning’s World Trade Center and Pentagon attacks six time zones away.
Events of the day sent visiting executives from the world’s top auto makers scrambling to arrange for ways to get home. Some glitzy new-model introductions were canceled, but the attacks did not otherwise disrupt the sprawling show of cars, trucks, motorcycles and vehicle parts that covers an area the size of more than a dozen football fields.
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BMW has a lot riding on the 7-Series models, which it says will sport the most technologically modern interior of any car. The product line will set the tone at the high end for the German auto maker, whose marketers value the U.S. as their largest overall market and California as the largest projected audience for the 7-Series.
“Our target is to be the most successful premium brand in the world,” BMW Chief Executive Joachim Milberg said in an interview. “But that doesn’t mean only volume. I think there are more values to be successful.”
To satisfy the needs of employees, shareholders and customers alike, he explained, “we have to have the most attractive products.”
The 7-Series cars come with what BMW calls the world’s first six-speed automatic transmission, mated to a new generation of eight-cylinder engines, either a 3.6-liter in the 735i model, rated at 272 horsepower, or a 4.5-liter in the 745i, at 333 horsepower. An ultra-premium version also will be available with a 12-cylinder, 408-horsepower engine.
“It’s the top of the line, so it’s a very important product for our lineup,” Milberg said. “Compared with the previous 7-Series, it gives the customer a greater range of equipment and comfort.”
The cars will go on sale in November in Europe and in January in the United States. Pricing has not been set but is expected to be near that of the current 7-Series cars, which sell for $63,000 to $92,000. Analysts say the model accounts for 20% or more of BMW’s profit.
“The 7-Series is one of the most important products for BMW given it underlines the position BMW has in the premium sector,” said Erik Burgold, an auto analyst with ING Barings in Frankfurt. “It’s a pride and profit center.”
Said James Hall, a veteran industry analyst for consultant AutoPacific in Detroit, who was attending the Frankfurt show: “It’s a critically significant car for BMW and for the market. BMW has been accused of building one sausage, three sizes. But there’s more competition on all sides than ever before. As you get more competition, there’s a strong incentive to change so competitors have a moving target. If you do it right, you force competitors to move their directions, and I think BMW is doing that.”
The styling of the new sedans gives them more curves and a wider front look with a narrow grille and turn signals over the headlights, among other changes.
“It’s a brand-new styling direction for the company,” said Stephen Haggerty, an auto analyst with Merrill Lynch in London. “BMW goes through quantum leaps in terms of design at times, and this is one of them. I think people will get used to it.”
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More significantly, a system called iDrive redefines the dashboard, eliminating most switches to control cabin climate, entertainment, navigation and Internet access. Those functions can be operated from a bulky knob, which can be pushed in, up-down and left-right or spun to make selections.
“The idea behind it is a new perspective in dealing with functionality in a car,” said Mike Peters, an engineer who worked on the system.
More than a few of the Frankfurt journalists who tested the system found it cumbersome to enter navigation destinations and e-mail texts, as this requires spinning and punching the control knob to select each letter.
And the functions can be used while the car is moving, a potentially dangerous distraction to drivers that BMW acknowledges. Though a message comes up at the beginning of each session, noting that it is dangerous to operate while driving, in the end, “It’s up to the driver,” Peters said.
Milberg said BMW will bring out a hydrogen-combustion version of the 7-Series, the 745h, during the model’s life cycle. For years BMW has been researching such technology, in which hydrogen is injected as a gas into an engine’s pistons and then ignited. That in itself produces no harmful emissions, BMW engineers say, although as in any internal-combustion process, the engine creates small amounts of pollutants as lubricating oils are vaporized.
Earlier this year, BMW demonstrated hydrogen-combustion engines in 7-Series sedans, but those had 12-cylinder engines, which because of inefficiencies in the hydrogen technology generated power equivalent to that of a V-8 engine.
But the technology is improving, BMW says, and its experimental eight-cylinder hydrogen engine puts out 184 horsepower, compared with the V-12’s 204.
The 745h will be dual-fuel, meaning that it will be able to use liquid hydrogen stored in a cryogenic tank under the rear seat or gasoline stored in a conventional fuel tank. BMW projects the car’s range at 220 miles using hydrogen and 405 miles on gasoline--625 miles if both tanks are filled and used.
BMW is attacking the luxury market at the low end as well. Its compact Mini brand, inherited from its takeover of Rover, is moving upscale and coming to the U.S. next year. The entry-level BMW 1-Series will make its debut the following year.
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Elsewhere at Frankfurt, and also in the premium performance segment, Mercedes-Benz unveiled the souped-up AMG version of its SL coupe, its most exclusive two-door.
The SL55 AMG has a supercharged 5.5-liter engine delivering 476 horsepower and goes from zero to 60 mph in head-snapping fashion, less than 4.6 seconds.
“This is the last model to get a crown jewel in terms of perfection and prestige,” said Rob Allan, manager of special vehicles for Mercedes-Benz USA, a unit of DaimlerChrysler. “It has the power and systems to make it a super-car contender, but with a retractable hard top.”
That hardtop, as long as we’re quoting specs, folds up smoothly into the trunk in 16 seconds.
Terril Yue Jones is The Times’ Detroit bureau chief. He can be reached at t.jones@latimes.com.
