BMW is readying new product to rival Mercedes-Maybach S-Class

Article by Andrew Christian, on March 24, 2016

With Mercedes-Benz massively dominating the super-luxury segment -- EUR150,000 ($170,000) and over -- with its Maybach version of the S-Class, BMW cannot just sit idly and watch its rival hog all the sales. BMW development chief Klaus Froehlich disclosed that BMW will soon have credible offers at this price bracket.

While BMW surely wants to earn the lucrative margins that Mercedes makes from sales of the Maybach, its new luxury car should still have attributes like any of its vehicles. According to Froehlich, BMW wouldn't need to stretch the car by another meter or two just to post higher sales revenue.

He said that BMW wouldn’t copy what its rivals do with their offerings – making the car measure 4 or 5 wheelbases in length with varying thick chrome packages. As it is, BMW is dominating the lower end of the luxury car market by offering vehicles with sporty genes like the 3 series.

However, those sporty DNA could limit BMW’s growth in uppermost sedan segments, where wealthier vehicle owners tending to be more conservative with preference towards comfort rather than agile handling. And this is where BMW is asserting its dominance.

In fact, around one of every two S-class models is sold in China, where sporty and dynamic driving is almost not a factor in choosing a luxury car. Most S class buyers in China have their own chauffeurs who often have to deal with traffic jams, a situation that typically eliminates the need for tight cornering.

With this situation, BMW decided to reposition its 7-series flagship with the latest generation launched in October and providing it with a smoother rider similar to that of the S class. In just over five months, the BMW sold around 9,000 units of the repositioned 7 series.

Mercedes-Benz, on the other hand, sold almost 9,000 S-class units every month in 2015. Despite shifting toward comfort, the BMW is still exposed on the upper end of the range, with the priciest 7 series having a starting price of around $126,000 in Germany. A big gap in the price range exists between the most expensive 7 series and the Ghost/Wraith line of Rolls-Royce.

However, a bigger problem has emerged with the drop in sales of Rolls-Royce in China, no thanks to a crackdown on corruption that has prompted wealthy Chinese to shun flashy shows of wealth. On the other hand, Mercedes exited the Chinese auto market for superluxury cars in 2012, allowing Rolls-Royce and Bentley to capture its customers between them.

Three years later, Mercedes revived the then-defunct Maybach sub-brand, thereby lending this iconic name to its new exclusive family of top-of-the-line cars. Mercedes first launched the Maybach S600 sedan and followed this with the Maybach Pullman stretch limousine.

Mercedes-Benz has been expected to offer a Maybach version of its GLS off-roader. BMW chief executive Harald Krueger recently admitted that luxury class will still be a high-margin segment, so the brand plans to improve its presence by adding a new model. This new model has been speculated by various automotive press reports to be a 9-series Dreamliner.

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