This Week in Car Buying: Mercedes-Benz chief says more models, more sales; BMW brings iPerformance to New York; Toyota to lease used cars; Alfa Giulia sets U.S. models
With five world debuts (four of them AMG models) at the New York Auto Show, one could say that Mercedes-Benz is awash in product offerings. It added a Coupe variant to its recently launched GLC Class SUV and now has somewhere on the order of 30 different models to choose from.
Conventional wisdom holds that manufacturers should avoid model proliferation in order to achieve economies of scale and simplify consumer choice. Not so, says Mercedes-Benz global head of passenger cars, Ola Källenius, who believes “model proliferation has been a foundation of the group.” In an interview during the New York show, he said that Mercedes will have more not fewer models in the years ahead. “By 2020 we will have 40 models to choose from.”
The key to making so many models work is using common component sets or platforms to spawn multiple variants that address both mass market and niche segments. “Tastes are going more and more individualistic” he observes, adding that it isn’t so important which model a customer wants because “all I need to know is I want a Mercedes.”
AMG in particular has benefited from this approach with the addition of the AMG 43 models with twin turbo V6 power across the line. It provides a more affordable alternative between the standard Mercedes models and the much more expensive AMG 63 V8 and AMG 65 V12. “AMG has traditionally sold between 12,000 and 15,000 units,” Källenius said adding that with the addition of the AMG 43, the sub-brand sold just short of 70,000 last year. The U.S. is the largest AMG market selling 12,000 last year and already with the addition of the new V6 versions, sales are up 150 percent in 2016.
BMW launches iPerformance
Looking to do for fuel efficiency and technology what the M brand has done for high performance, BMW has launched its iPerformance nomenclature for its regular production models featuring hybrids and other alternative technology from its “i” sub-brand.
“We have the M on one side, which is performance and i on the sustainability, technology side,” said Hildegard Wortmann, head of product strategy for BMW AG in explaining the genesis of iPerformance. The iPerformance variants will be “core BMW models with features derived from the i brand.”
The first model to be marketed under the iPerformance banner is the BMW 330e, a plug-in hybrid that provides up to 14 miles of pure EV operation. The vehicle is fitted with a 180-horsepower twin turbo 4-cylinder that works in concert with an 87 horsepower electric motor. Combined output is 248 horsepower and 310 lb-ft of torque, giving the car an ability to accelerate to 60 mph in 5.9 seconds and hit a top speed of 140 mph. In pure electric mode, the car has a top speed of 75 mph.
According to BMW, the iPerformance technology includes electric motors, lithium ion battery packs and the power electronics technology and will be adapted to other standard models in the BMW lineup in the coming years. The BMW 330e iPerformance goes on sale this summer with a base price of $44,695 including destination.
Toyota to lease used cars
A large number of off-lease cars are expected to hit the market this year and typically those units have been retailed at Certified Pre-Owned vehicles by franchised dealers. Toyota is going an extra step by offering potential customers the option to lease rather than buy. The program started in January in the Northeast, a market with high lease penetration and the automaker is looking to roll the program out nationally to other regions.
According to Automotive News, the program is designed to offer prospects lower monthly payments of a lease rather than the high payments required in a traditional sale. Toyota is looking to increase its CPO program to 400,000 units this year, an increase of 8 percent. “We’ve got a record number of off-lease returns this year—about 275,000—and I think the industry also does,” Bill Fay, Toyota’s sales chief, told the trade paper. “It’s important for all of the industry to have a plan to absorb those lease returns and have a good process to reintegrate them back into the marketplace.”
While leasing is not expected to account for a large share of Toyota’s overall CPO program, it does offer consumers another choice, especially in markets where customers often prefer a lease over an outright purchase. In some of the regions where the program is starting, dealers report seeing 3 or 4 percent of their customers opting to lease a Certified Pre-Owned unit.
Alfa Romeo Giulia lineup set for America
When the 2017 Alfa Romeo Giulia goes on sale later this year, it will be offered with a choice of two engines in three trim levels, Giulia, Giulia Ti and Giulia Quadrifoglio. Both the base and Ti models will be powered by a 2.0-liter turbocharged 4-cylinder engine mated to an 8-speed automatic transmission and a choice of rear- or all-wheel drive. These models will be capable of accelerating to 60 mph in less than 5.5 seconds and have a top speed of 149 mph. The high performance Quadrifoglio boasts 505 horsepower from a twin-turbo 2.9-liter V6 driving the rear wheels only through a 6-speed manual gearbox. That model will be able to accelerate to 60 mph in 3.8 seconds and a top speed of 191 mph.
In Europe, the Giulia also is offered with a diesel engine, which won’t be coming to the U.S. and its model designations are Giulia, Giulia Super (which has the 2.0-liter turbocharged gas engine) and the Quadrifoglio. Pricing on the U.S. versions will be announced closer to their on sale date.
Also at the New York Show, a refreshed version of Buick’s subcompact crossover SUV was shown in the form of the 2017 Encore. The revamped model sports a new signature grille for the division.