Rumors are circulating that BMW is set on creating a bigger X7 that is meant to become a major player on the SUV market in the US. BMW is pinning its hopes on the fast recovery in North America. It expects that as a result, new market opportunities will arise for the big BMW SUV to rival the Chevy Tahoe, Suburban, Yukon, Escalade.
In 2008, BMW junked the project to produce the X7 when the economic crisis affected all carmakers, causing BMW to increase the production of more fuel efficient vehicles instead.
But the situation has shifted and BMW now sees high demand for this vehicle in the US as well as emerging markets like China and India.
China is BMW’s most profitable market for large sedans, citing China’s strong demand for luxury goods. Bernstein Research estimated that China accounts for 50% of BMW’s operating profits.
BMW admitted that its profits in China are in the low two-digit range. With the X7 project back on, it is anticipated that it will share its platform with the 5 Series long wheelbase variant or the next generation 7 Series. In an interview with WSJ, Friedrich Eichiner, BMW's chief financial officer, said that BMW is “downshifting.”
But while BMW is believed to build one big sedan, it isn’t raising production to cope with the orders in China. BMW said that it wants to ensure that the supply for the US and Germany is sufficient.
The carmaker is more optimistic about the speed of the US recovery and thinks that rebalancing is not as needed as other auto industry leaders believe. Eichner added that BMW is rethinking its decision to cancel a new large SUV, which was intended for the US market. [source WorldCarFans via BmwBlog]