By Leow Ju-Len

IS BMW’S NEW 3 SERIES A FLOP?
MANY IN THE car trade are wondering about the impact of the BMW 3 Series in the market, for two important reasons: one, it’s BMW’s best-selling model, and two, it was one of the more high-profile cars to be launched in the early part of the year.

Since then, however, senior and marketing managers from rival brands are openly wondering if the new 3 Series is delivering the results expected of it. They cite its absence from roads here as evidence that it’s doing poorly. So, is the new 3 Series a flop?

Absolutely not, according to Performance Motors. “It’s doing very well. I think it’s creating a stir,” says Belinda Bay, a marketing manager with the BMW dealer. “It’s already on the roads, with quite a lot of presence there. We’re getting more cars in terms of shipments, so you’ll start to see more of them on the road.”

Do the numbers bear this out? Figures from Performance Motors suggest so. “We’ve got more than 300 orders,” says Ms Bay. “On the road, we’ve got about a hundred.”

On a broader scale however, Motor Traders Association figures indicate that BMW is lagging arch-rival Mercedes-Benz here, with sales of 620 and 1,028 respectively up to April this year. Bear in mind that the two brands were neck-and-neck last year.

Compare and contrast that with the rest of the world too, where for the first time ever, BMW is beating Mercedes-Benz. Year-to-date global sales show BMW in the lead with 428,489 units (a 7.8 percent increase), versus 402,400 sales for the three-pointed star (a 6.5 percent decline).

By no means, then, is BMW having a tough year except, it seems, for here in Singapore. But the problem of an allocation crunch is backed up by BMW Asia. A spokesperson e-mailed CarBuyer to say: “You do realise that this is because deliveries of new models like the 3 Series and 7 Series take time to show up in registrations? Most of the new cars will be delivered in June.”

So while BMW appears to be struggling, a truer picture of the company’s fortunes isn’t likely to appear for at least a couple of weeks from now. It’s too early to judge if the 3 Series is a flop or not, in other words.

For now, we’ll let BMW have its say. “Wait till year end for the final picture,” writes the BMW Asia spokesman. “It’s going to be very interesting.

THE RISE AND RISE OF KIA
2005 IS SHAPING up to be Korea’s year, with Kia doing particularly well. Figures up to May 31st show 2,264 registrations on the scoreboard. That’s a whopping 116 percent increase over the same period last year.

May was a blockbuster month for Cycle & Carriage Kia, with 627 cars registered. Kia’s example shows what a broad product line-up can do for a car company. The Sportage, a mid-sized Sports Utility Vehicle, has chipped in just 259 units of the total, but every one of those sales is incremental since Kia wasn’t present in the segment last year.

Nor is the brand’s success merely down to a single killer model, either. The Picanto, Kia’s cheapest offering here at $38,999, added 709 units to the tally, with the Rio family of compact sedans and hatches contributing a further 500 or so. What else has caused Kia sales to double? Adverts in CarBuyer, perhaps? “Korea has done its part. The designs are good. But I’d like to think our marketing efforts have paid off!” says Mavis Toh, the marketing manager at C&C Kia. They probably have, too.

The company constantly targets potential customers with direct mailers, gathering data from finance partners Citibank and DBS. If you’re a customer of those banks, earn a certain income and are in the target age group, check your mailbox for a Kia flyer soon.

Then there are off-beat efforts, like the giant Picanto balloon hitched to the Kia showroom, floating tantalisingly at eye-level with passing MRT commuters.

Ms Toh says the brand has gathered its own momentum, as well. “For some reason, the brand has really grown,” she says. “On weekdays our showroom used to be empty, but now at any time you’ll see people there, and they’re coming in to buy.”

The other Koreans are having a banner year, too. Figures up to April show that Chevrolet is averaging 200 cars a month or so. That’s a fivefold increase over 2003, the brand’s final year as Daewoo, when around 42 ‘Chevroloos’ were registered each month.

Over at Hyundai, the Sonata 2.4-litre executive sedan isn’t proving to be a hit, and probably won’t be until a 2.0-litre version is available, but stalwarts like the Matrix Multi Purpose Vehicle have taken up the slack. Up to April, the Hyundai tally is 5,127 according to the MTA. Annualised, that works out to 15,381 sales, which beats last year’s 13,796 by some margin.

IS THERE GOING TO BE A NEW MINI DEALER?
RUMOURS ABOUT FRANCHISES and dealerships changing hands are always, always making the rounds in the local car trade, and the whispers currently gaining momentum this month are about the Mini brand.

Performance Motors currently holds the franchise, probably as a natural offshoot of its relationship with BMW, given that Mini is now a brand of the German marque. The rumour mill says that Mini and Performance Motors will part ways, and ordinarily, we would keep one eye on the situation, but treat the story with a pinch of salt. However, what gives the rumour a twist this time is that, instead of taking the usual ‘Dealership X is about to lose Brand Y’ format, the story goes that Performance Motors intends to give up the Mini brand when the contract ends. Voluntarily.

Such things have happened before, of course. Cycle & Carriage effectively washed its hands of Proton in 2003, for example. Why would Performance want to lose a brand? Margins on Minis aren’t great, for one thing, and the brand isn’t a huge seller, averaging some eight cars per month up to April. By divesting itself of Mini, Performance would be able to better focus its marketing and after-sales efforts on BMW, which is the true money-spinner for the company, as well as parent Sime Darby.

Performance Motors’ managing director Simon Rock could not be reached for comment, but a spokesman for BMW Asia told CarBuyer that BMW Group contracts are renewable every year. “We do not give out long-term contracts to anyone, with a few very rare exceptions,” he wrote. If there’s any truth to the matter, then, the Mini brand could be headed elsewhere within a year. Which begs the question: who is the next Mini dealer going to be?

HOW IS VOLKSWAGEN DOING?
ONE OF THE bigger stories of the year was the news that Volkswagen would take back the import side of its business here, leaving former importer Car & Cars Pte Ltd with the retail or dealership end of the stick.

Effectively, this means that Volkswagen Group Singapore Pte Ltd is buying cars from Volkswagen in Germany, shipping them here, paying all taxes and duties, doing the bulk of the marketing and promo efforts, then setting the retail prices (and thus, Car & Cars’ margins) and leaving its dealer to close the sales.

Is the arrangement paying off? MTA figures say that VW sales up to April totalled 102 cars, or about 25 units per month. Add in May, says VGS, and the figure should be closer to 150 cars.
That seems to compare well with last’s years performance, when the brand notched up 290 sales for all of 2004, but it isn’t a huge difference.

Of course, VW’s share is bound to grow once new models like the next-generation Passat medium executive car and Polo compact hatchback enter the line-up here, especially since the latter car brings the brand into territory that it didn’t explore under Car & Cars.

That sort of product proliferation, says VGS, is one of key differences that customers should expect from the new business arrangement. “We have opportunities to expand the line-up and we intend to give customers, with every lifestyle and every need, the right car,” says Olaf Duebel,
a VW director and the boss of VGS.

In any case, Dr Duebel is adamant that it’s too early to assess Volkswagen’s performance as its own importer here. “We are at the phase where we are improving,” he says. When would be a fair time to judge? “I think at the end of the year,” is the answer. Expect CarBuyer to check back in about six months’ time, then.