Summit Notebook

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BMW keeping wary eye on rivals

November 2, 2009

After a year of unprecedented turmoil in the auto industry, BMW’s U.S. head smells blood in the water.

Changes in ownership at some of its historic European rivals may present the German luxury automaker with a chance to grab market share. 

But even as Jim O’Donnell saw weaknesses to exploit, he raised the worry that one of Detroit’s most storied car brands, Cadillac, could take out of the market of the company that calls its vehicles “the ultimate driving machine.” 

As Cadillac’s parent company, General Motors Corp, went through a bankruptcy that forced it to cut thousands of jobs and shed brands, BMW picked up Cadillac customers and dealers. But a slimmed down GM could present a renewed threat, said the president of BMW’s North American unit. 

“Going forward, I actually see Cadillac as one that could be potentially a serious rival,” O’Donnell told the Reuters Autos Summit in Detroit. “Now that GM is only going to concentrate on four brands, if I was at GM, I would concentrate on Cadillac and really try and reestablish it. But if you look at the last year, and no wonder because of the turmoil in the marketplace, has been losing sales quicker than the market.”

Even as he sees a renewed threat from Detroit, O’Donnell said he thought European rivals could become more vulnerable. BMW sees a chance to snatch customers from Saab — which GM aims to sell to Swedish luxury car maker Koenigsegg — and Volvo — which Ford is negotiation to sell to Chinese automaker Geely. 

“Where are all the Saab customers going to go? And there’s a great deal of uncertainty over Volvo. Where are all the Volvo customers going to go? Even though they’ve done well these last three months, I still think as they come under the ownership of Geely, will they have the same believe in the brand? I don’t know,” O’Donnell said. “But we will try to exploit it.”

Comments

“Where are all the Saab customers going to go?”
I guess they’ll stay with Saab. If they’ve remained customers of the GM-diluted Saab why would they up and leave when the company returns to it’s Swedish roots, particularly under Koenigsegg ownership?

Posted by Joe G | Report as abusive
 

the auto industry is facing the acute problem of global recession within the consumar’s foroum irrespective of the geographical boundries.Despite the government’s initiatives within the respective teritorries.the global recession is visible ecerywhere and therefore the bankrupcy problem is visible

 

BMW sales in the US are off 19% from last years pace, they have pushed their dealers to expand and add cost to their franchises at the same time people are defecting from the brand. BMW’s big sales gains came from $399 lease deals (fast food for the car industry) and their ownership experience has not been the best.

Just look at Consumer Reports result.. BMW ranked 26 dropping 6 places in Predicted Reliability.. while Saab moved to 11th UP 12 positions above Volvo VW, MB and Audi. If anything Saab is going to attract BMW owners.

Posted by RobbLouis | Report as abusive
 

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