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BMW’s ‘Boss’ SUV Targets Mercedes Gains to Defend Lead

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Krisztian Bocsi/Bloomberg
BMW’s biggest SUV, known internally as “the boss,” will hit dealers in November, sporting features that can detect people or animals in the dark to help avoid collisions and drive autonomously in traffic jams.
After seeing its biggest SUV outsold by the Mercedes-Benz M-Class last year, Bayerische Motoren Werke AG (BMW) is fighting back with a model it calls “The Boss,” a new version of its X5 stuffed with advanced technology.
Enlarge imageAudi's Q7 Automobile
Audi, now BMW’s closest follower, plans to overhaul the Q7 as early as next year to put pressure on the X5. Photographer: Graham Crouch/Bloomberg
The $52,800 sport-utility vehicle can drive itself in traffic jams and features night vision to avoid hitting people or animals in the dark. The revamped model, introduced yesterday at the International Auto Show in Frankfurt, will reach showrooms in November.
“We want to get back to the top with the X5,” said Herbert Diess, development chief for the Munich-based company.
SUVs have become a critical battleground in BMW’s effort to fend off Daimler AG (DAI)’s Mercedes and Volkswagen AG (VOW)’s Audi, which have both vowed to become the No. 1 luxury-car brand by 2020. With demand for SUVs rising fromCharlotte to Shanghai, IHS Automotive expects the global market for the models to grow 41 percent from last year through 2018 to 18.6 million vehicles.
The X5, which is lighter and gets better gas mileage than its predecessor, will surpass the M-Class next year, IHS predicts. Toyota Motor Corp. (7203)’s Lexus RX outsells both the German models globally.
To fight back, Mercedes is taking aim at the lower end of the luxury SUV market with the new GLA compact. That car will challenge BMW’s aging X1 as Daimler seeks to woo younger buyers away from its German rivals.

38 MPG

The GLA “can be a driver in the growth of the segment,” Daimler Chief Executive Officer Dieter Zetsche said at the Frankfurt show. To fuel its pursuit of BMW, Mercedes plans to roll out 13 all-new models over the next eight years.
BMW has delivered 1.05 million cars worldwide this year, 21,100 more than Audi and 132,000 more than Mercedes.
Adding to the pressure on BMW, Audi will overhaul its full-size Q7 SUV -- currently outsold two-to-one by the X5 -- as early as next year. The VW unit plans to double its SUV lineup to six models by 2020.
“We are not worried about the upcoming Q7,” said BMW’s Diess. “Competition always spurs us on.”
BMW trimmed the X5’s weight by as much as 90 kilograms (198 pounds) by using magnesium supports for the dashboard and more aluminum components. That helps reduce fuel consumption to about 38 miles per gallon for the six-cylinder diesel version, based on European fuel-economy data, versus about 35 mpg for the M-Class. BMW expects to add a plug-in hybrid X5 in 2015.

Self Parking

For $500, buyers can add a self-parking option. The automated driving feature, which won’t be available in the U.S., keeps the car in its lane and tracking the speed of the vehicle in front, including coming to a full stop.
After a troubled takeover of British automaker Rover, BMW developed its own SUVs rather than hold on to the Land Rover (TTMT) brand. The X5, introduced in 1999, was its first push into the segment, a move that helped lay the groundwork for overtaking Mercedes in sales in 2005.
To stay ahead, BMW is expanding its lineup with new models such as the 4-Series coupe, the X4 SUV, the i3 electric city car, and the i8 plug-in hybrid sportster.

Floating Pavilion

The company allowed attendees at the Frankfurt show to try out the i3 on a 300-meter track that snakes up and down the interior of BMW’s three-story exhibition hall. With a BMW driver at the wheel and up to three passengers along for the ride, the cars speed almost noiselessly at up to 50 kph along a white roadway. The gimmick is part of an effort to upstage car-show rivals such as Audi, whose pavilion appears to float in the air.
The bravado doesn’t mask the fact that the X5’s exterior does little to signal the new technology under the hood. Stiff styling could prove a headwind as BMW’s challengers mount, according to Juergen Pieper, an analyst with Bankhaus Metzler.
“There are hardly any major changes perceptible” in the X5’s design, Pieper said. “It’s getting difficult for BMW to up the ante. The X5 is the first model where this is the case, but this might become an issue for the whole group.”

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