BMW Delays Sales of 1-Series in U.S.

April 10, 2004; Jeff Green writing for Bloomberg reported that BMW, the world's No. 2 luxury automaker, delayed U.S. sales of a new entry-level 1-Series car because the initial hatchback model was unlikely to appeal to buyers, the company's CEO said this week.

"Americans don't like hatchbacks, and we are still deciding what the best model for the next 1-Series should be," BMW CEO Helmut Panke said in New York. The car's next version will be sold in the United States, he said, without giving a schedule.

BMW, seeking to replace DaimlerChrysler AG'sMercedes as the top-selling luxury brand, has introduced new models such as the X3 sport-utility vehicle and the $70,000 6-Series sports coupe to win buyers, particularly in the United States. BMW has led Mercedes in the United States since 2001 and trails Toyota Motor Corp.'s Lexus.

Munich-based BMW is building a factory in Leipzig, Germany, to free capacity in plants for the 1-Series model, which it will introduce this year in Europe. The car will compete with the Audi A3 and the Mercedes-Benz A-Class, neither sold in the United States.

Since 1990, sales of hatchback model cars in the United States have never exceeded 4.7 percent and typically don't top 2 percent, Lexington, Mass.-based Global Insight Inc. reports. Hatchbacks, with two passenger doors and a door, or hatch, in the back, accounted for 225,000, or 1.4 percent, of 16.6 million cars and trucks sold last year, Global Insight said.

"There have been negative connotations for hatchbacks because they were seen as cheap, like you couldn't afford a car with four doors," said Global Insight analyst Rebecca Lindland. "The attitudes are changing with younger buyers, but the automakers still remember they were unpopular."

BMW introduced a 3-Series hatchback, the 318t, in the United States in 1995, and sales peaked at 7,235 in 1996, Global Insight said. Sales fell every year after that to 700 in 2000, the last year for U.S. sales, Lindland said.

"Our success with the 318t many years ago was less than we expected," said Tom Purves, BMW's North American CEO. "From our perspective, there is not yet a natural hatchback market" in the United States.

Mercedes also will introduce a station-wagon version of a redesigned A-Class, specifically built for the U.S. market, in 2005, spokeswoman Donna Boland said. The A3 is scheduled to go on sale in the United States next year.

BMW sold 36,000 Minis, also a hatchback, last year and may reach 40,000 by 2005 by adding a convertible this year, Jack Pitney, head of Mini's U.S. unit, said.

Mini sells because Americans don't know it's a hatchback, Purves said. BMW will have a 1-Series U.S. model by 2010 and may be sold in the style of a sedan, coupe and convertible, he said. "The reason there is a question mark about 1-Series is that it takes us back into a size we've been out of. It takes us to a price point we haven't been to in a long time with BMW," Purves said. "Our view is we can."

BMW 1 Series Press Release

BMW is poised to shake up the compact executive segment with the arrival of the new 1 Series. Featuring four engines, three gearboxes and rear wheel drive, a combination not found in any of its competitors, the BMW 1 Series makes its entrance in Autumn 2004 and will immediately offer a new benchmark to driving dynamics in its class. A 1.6-litre petrol engine producing 150Nm of torque at 4,300rpm powers the entry-level BMW 116i. The 115bhp unit achieves a zero to 62mph time of 10.8 seconds and a top speed of 125mph. Even with this high level of performance, the 116i achieves an economical fuel consumption of 37.7mpg.

The high-performance four-cylinder petrol model is the BMW 120i with its 150bhp and 200Nm (at 3,600rpm) 2.0-litre VALVETRONIC petrol engine. Light and nimble, the 120i covers zero to 62mph in 8.7 seconds before going on to achieve a maximum speed of 135mph.

The BMW 1 Series launch line-up is completed with two versions of the powerful yet frugal 2.0-litre common rail diesel engine. The 122bhp BMW 118d averages 50.4mpg while posting a zero to 62mph time of 10 seconds and reaching a top speed of 125mph. The higher-performance 163bhp BMW 120d achieves 49.6mpg yet is capable of a 7.9 second zero to 62mph time and a 137mph top speed. Instant turbo power delivered smoothly to the red line results in the 120d posting sharper performance figures than its 2.0-litre petrol equivalent.

In-gear overtaking in both diesel models should prove rapid thanks to a maximum torque of 280Nm and 340 Nm respectively, much of this urge available from a low 2,000rpm. Both diesel-engined derivatives and the two petrol units are EU4 emission compliant.

Power is delivered to the road via a six-speed manual in 118d, 120d and 120i models, while the 116i has a five-speed manual gearbox. An optional six-speed automatic will also be offered on 120i and 120d models.

Although a new car in a new premium segment, the 1 Series has the traditional BMW design trademarks - the front kidney grille, double headlamps and 'Hofmeister kink' on the C-pillar all feature. These punctuate a genuinely head-turning styling that ensures the new 1 Series will stand out amongst its competitors.

After slipping behind the wheel and firing up the engine via a starter button, the driver will go on to enjoy BMW's renowned 50:50 weight distribution and front engine, rear wheel drive set-up - unique in this class. Coupled with a technically elaborate aluminium front axle and five-link rear suspension, this ensures optimum handling and traction, and the most invigorating drive in the compact executive segment. A drag coefficient of just 0.29 helps the new BMW 1 Series slip through the air with maximum efficiency and the minimum of noise. Standard fit 16-inch run-flat tyres also means the days of motorway hard shoulder tyre changes are over.

Measuring just 4.23 metres long, but with a relatively long wheelbase of 2.66 metres, driving dynamics have been cleverly worked into a practical four-seater. The new 1 Series offers ample shoulder and legroom for rear passengers and, thanks to split fold rear seats that fold virtually flat, a similarly generous luggage capacity of between 330 to 1150 litres of storage space.

Dynamic Stability Control, Dynamic Traction Control, Dynamic Brake Control and Electronic Differential Lock help ensure the 1 Series provides the highest standards of active safety without impacting unnecessarily on driving enjoyment. An airbag system that includes head airbags for all occupants means the new BMW 1 Series also meets the most stringent passive safety requirements.

The high level of standard safety features combined with structural integrity means that the new 1 Series is clearly aiming for five stars in the EuroNCAP crash test.

Meanwhile, optional extras include Bluetooth capability, sports seats with backrest width adjustment, acoustic Park Distance Control at the front and the rear and Bi-Xenon headlights. The pioneering iDrive controller when mated to a navigation system is also an option. Keyless access and voice-activated radio and navigation systems will appear after launch.

Overview of specifications

116i 85 kW /115 bhp at 6000 rpm; 150 Nm at 4300 rpm; cubic capacity 1.6 litres; 0-62 in 10.8 s; top speed 200 km/h (124 mph); fuel consumption 7.5 ltr/100km

120i 110 kW / 150 bhp at 6200 rpm; 200 Nm at 3600 rpm; cubic capacity 2.0 litres; 0-62 in 8.7 s; top speed 217 km/h (135 mph); fuel consumption 7.4 ltr/100km

118d 90 kW / 122 bhp at 4000 rpm; 280 Nm at 2000 rpm; cubic capacity 2.0 litres 0-62 in 10.0 s; top speed 201 km/h (125 mph); fuel consumption 5.6 ltr/100km

120d 120 kW / 163 bhp at 4000 rpm; 340 Nm at 2000 rpm; cubic capacity 2.0 litres; 0-62 in 7.9 s; top speed 220 km/h (137mph); fuel consumption 5.7 ltr/100km

Prices for the all-new 1-Series will be announced later in the Spring.