- Published: Tuesday, 04 August 2015 01:16
The story of how BMW’s market share has dropped in half… and how a new model could turn things around
SINGAPORE — This month BMW will launch the 116d in Singapore. It will be the luxury brand’s smallest and cheapest car here. Which is why it will be one of BMW’s most important models.
Prices for the five-door hatchback have yet to be released by dealer Performance Motors Limited. But it’s certain that with a 116 horsepower, 1.5-litre diesel engine, the 116d will give BMW a model that can be registered with Category A COE (or Certificate Of Entitlement).
That bodes well for BMW’s sales. No one may register a new car in Singapore without a COE, so the supply of the prized certificates has a direct impact on sales numbers.
Category A COEs have become more plentiful this year, so this means that not only BMW will be able to sink its teeth into a new pie, but it will take a bite out of one that is growing. In January there were a little over 1,400 of them up for grabs every month. Starting this month there will be 3,373 Category A COEs available. The Quota will be revised in November, and expectations are high that there will be still more COEs to go around.
Till now, BMW had been forced to do its fishing in Category B and E waters. Those COEs are for cars with engines bigger than 1.6 litres, or more than 130 horsepower, and for anything with wheels and engine, respectively.
Collectively, that pool has been widening too, but not nearly as quickly as the Cat A one. In January there were 1,683 of these COEs available. This month the Category B and E supply is, collectively, 2,834 in number. In other words, while Category A COEs have more than doubled in number since the start of the year, the Category B and E supply has expanded by around 68 percent.
Perhaps the best way to anticipate the impact of a Category A model like the 116d on BMW’s sales is the see what happened when the COE system was altered to exclude its cars from that part of the market.
In 2013, BMW sold 3,730 cars (second only to Mercedes-Benz in total sales) to claim 16.6 percent of the market. Then in early 2014, cars with more power than 130hp were suddenly reshuffled to Category B, thank you very much. BMW’s sales dwindled to 3,239 while the market grew overall, leaving it with an 11.2 percent share.
This year, thanks largely to Category A’s enormous growth in supply, the car market has continued to gallop away from BMW; in the first six months of 2015 its share has dwindled to just 6.7 percent.
Can the new 116d reverse that? Apart from the new Cat A-friendly engine, the 1 Series will be arriving with a facelift.
In a departure from the usually timid updates that BMW tends to give its cars, the new 1 Series has a noticeably new face.
Here's what it looked like before:
And here, for comparison, is the new car:
While redesigned lamps front and rear sharpen up the styling considerably, the new engine sips around 3.6L of diesel per 100km, and should emit so little carbon that the 116d will qualify for a CEVS rebate worth at least $10,000 ($15,000 if we’re lucky).
With an eight-speed auto, the 116d trots to 100km/h in 10.3 seconds, but the engine’s torque peak of 270Nm should help it to feel lively in town. Yet, there are obstacles for the BMW to overcome that have little to do with its performance on the street.
Diesel engines have largely failed to crack the market here. BMW, for one, has sold just 33 of them this year, out of 1,737 cars.
Mercedes-Benz has three Category A models in varying styles to offer buyers — the latest of which was launched on Saturday — and all of them are petrol powered.
Yet, the brand can draw courage from Volvo — the Swedish brand’s diesel cars now outsell its petrol models nearly two-to-one, thanks also to engines that enable its cars to sneak into Category A. Its sales have risen overall by more than 90 percent compared to the first half of last year, showing that Singapore drivers can be nudged into diesel cars after all.
It might be too early to call the BMW 116d a success, of course, but it seems likely that as the nation gets busy celebrating its 50th anniversary in August, there should be reason to party at BMW.
Perhaps the broader lesson here is that the attempt to redraw the COE lines and put up a fence to keep luxury players out of Category A was always doomed to futility, given the ability of manufacturers to respond. There may be many ways to skin a Cat, but there are numerous means of fulfilling it, too.