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BMW sees flat growth this year

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By Bernie Cahiles-Magkilat

BMW Philippines, the largest luxury car player in the country, expects flat growth in 2018 from a record high of over 30 percent in 2017 on the assumption that its buyers already frontloaded their purchases last year to beat the higher excise tax on motor vehicles which took effect first of January of this year.

Maricar Parco, BMW President, told reporters at the launch of its All-New BMW X3 on Friday they are cautiously optimistic this year after posting a record growth in 2017 due to the implementation of higher taxes on cars under the government’s TRAIN Act, the weakening of the peso against the US dollar, among other factors.

Aside from customers having frontloaded their purchases to avoid the higher taxes, Parco said that the growth in 2017 was also boosted by the Philippines’ hosting of the ASEAN Leaders Meeting where BMW served as the mobility partner.

For 2018, Parco said sales would be driven by the launch of most of the BMW X series models.

After the X3, BMW will be introducing X2 in the second quarter to be followed by the updated X4 and the all-new X5 by end of the year.

“This is going to be an X Series introduction that has never been seen before. We have four models to drive sales,” Parco said. BMW accounts for at least 30 percent of total luxury car market segment.

She also expects sales this year to be driven by a shift largely to the X3 model, which will be sold for the same price as last year at R4-million price range.

Parco said they are able to maintain the X3 pricing because the model is into a “sweet spot” where excise taxes are actually lower under the new TRAIN law.

“We are banking on this model this year as our best seller because of the very attractive pricing and it is a new model,” she said adding that X3 is expected to contribute at the very least 20 percent of the X series volume mix. Last year, X5 and X3 account for 40 percent of the series total sales.

BMW customers, who belong to the A market, are said to have a faster adjustment period and can easily adjust to new pricing points.

“We have a very good product range from less than P3 million all the way to P14 million so wherever the budget is I think we are able to serve with the product,” she said.

BMW became majority-owned by businessman Ramon S. Ang when he bought 65 percent stake in the Asian Carmakers Corp., which used to be wholly-owned Filipino company under the Alvarez Group of Companies chaired by Palawan Governor Jose Ch. Alvarez.

SMC Asia Car Distributors Corp., which is 65 percent owned by SMC and the remaining 35 percent by Alvarez, is now the corporate vehicle for BMW Philippines.

According to Parco, Ang’s directive is to further strengthen its leadership in the luxury car market segment.

She noted though that while BMW is the market leader in the luxury passenger car segment selling 1,350 units last year, Mercedes Benz sold 1,500 units making them the overall segment leader. But Parco explained that of the 1,500 unit sales of MB, about 300 units were actually MB vans. So if the comparison is on the passenger alone, BMW is still the leader.

“We are going to stay in the passenger car market only,” said Parco.

Parco said that being under the umbrella organization of the SMC made them more excited stressing that Ang could only accept for market leadership in all of their businesses.

But being under the umbrella organization alone is already a big boost to BMW’s growth, Parco said.

BMW has 8 dealership network, the biggest in the luxury segment and there is no plan to open more.

Ang, a car enthusiast, is not also getting or putting up his own dealership. “We just keep on selling him cars and he is the first to drive our cars,” Parco said.

So far, BMW Philippines distributes 14 models, including the 7 X series models, but excluding the variants.

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