BMW: Beware Hyundai-Kia

The Korean Hyundai-Kia group has been identified by BMW as a likely long-term competitor ahead of the potential threat posed by re-emerging luxury brands such as Jaguar, Volvo and Alfa Romeo.

Speaking in Melbourne last week, BMW Group's senior vice-president for Asia, Pacific and South Africa, Hendrik von Kuenheim, told motoring.com.au that ambitious plans announced by the likes of Jaguar and Alfa to take on BMW and its fellow German heavyweights Mercedes-Benz and Audi had to be assessed on the basis of ongoing performance.

“At the end of the day they also only cook with water and regardless how good their PR work is once in a while, when it comes down to quarterly sales results and profits results maybe the talk they had in the previous three months and the reality don’t match.

“I think if you want to go back and look at top-notch performance in the luxury car segment then BMW is the company to look for in the last 10 years.”

Von Kuenheim, whose role includes overseeing the Korean market, said attention should be paid to the rapidly emerging Hyundai-Kia group, especially by Japanese brands.

“I think the Hyundai-Kia motor group is incredibly aggressive, incredibly advancing,” he said.

“You see here a change of guards where some of the Korean product is replacing some of the Japanese product and eventually putting a challenge to BMW, clearly.”

Hyundai has started dabbling in the luxury segment with its Genesis range. The second-generation sedan was launched late last year in Australia.

Tata-owned Jaguar is rolling out its self-styled 3 Series beater, the XE, while Alfa – part of the Fiat Chrysler group -- is launching its all-new mid-size rear-wheel drive sedan mid-year as the lead-off for an eight-model reinvigoration of the brand.

Volvo is also in the early stages of a model overhaul with the XC90 SUV, while GM-owned Cadillac continues to promise substantial expansion. Others circling the Germans include Toyota-owned Lexus and Nissan-owned Infiniti, while EV newcomer Tesla has attracted attention and sales with the Model S.

But von Kuenheim made the point that various competitors had come and gone over the years, all espousing the ambition to take on the German luxury trio.

“Look the importance of the Italians in the ’60s, ’70s and ’80s and the French and where they are today.

“The Scandinavian brands virtually disappeared; I remember still when I started in North America, Volvo was the biggest brand. Not Mercedes, not Lexus. Volvo. Where are they today?

“When I lived in the USA … Honda launched the Acura brand. I was there when Nissan launched the Infiniti brand and Toyota launched the Lexus brand. And if you look at where those brands are today and where BMW is, I think all brands were for BMW another wake-up call to run even faster, be even more innovative, be even more customer focussed.

“But they are no match on a global basis to BMW and their German competitors.”

Von Kuenheim is the son of legendary BMW executive board chairman Eberhard von Kuenheim, who ran the company from 1970 to 1993 and effectively shaped it into the global sales force it is today.

He insists the company his father ran has the methods, philosophy and product strategy to resist any challengers.

“In the last 10 years BMW has been the largest luxury brand in the world. We were in 2014 again and clearly again in the first quarter of 2015 and the first four months of 2015 and when it comes down to profitability we can clearly say the business is the best run in the world.

“We have a constant stable return our shareholders in the guidance of eight to 10 per cent. If you look at our competitors they have gone like a yo-yo.

“We focus on what we do, we have our strategy, we have our slogan ‘the ultimate driving machine'. BMW is a hard charging company and we are looking at selling two million cars this year approximately.

“And if I look at our product at what we have coming, I think we are very much on the edge of being very aggressive, very useful and very modern in technology and design. So I am not concerned at all.”