BMW Expands Its Presence in the Commercial Fleet Market

The 2012 calendar-year was a strong sales year for BMW, which ended the calendar-year as the No. 1 selling premium brand in the U.S. This marks the second consecutive year that BMW achieved this distinction. In 2011, BMW was the best-selling premium brand in the U.S., ending the 11-year streak by Lexus, which was constrained by inventory shortages due to the March 2011 earthquake and tsunami in Japan.

Worldwide, BMW Group’s global sales hit a record of 1.8 million units sold in the 2012-CY. BMW’s sales strength was broad-based in all global regions. Sales increased in China by more than 51 percent in calendar-year 2012, fueled by demand for the locally built X1 crossover and the long wheelbase version of the 3 Series sedan. Even in Europe, where industry-wide sales have collapsed due to the European Union’s sovereign debt crisis, BMW’s sales volume has remained steady.

Fleet Sales Gain Momentum
Corporate fleet sales contributed to BMW North America’s 2012 sales performance in the U.S., which witnessed a 45-percent increase. Heading up BMW’s fleet sales in the U.S. is Drew McClelland, corporate sales manager, BMW North America.

“With the newly released BMW 328i, we have seen an increase in acceptance of the vehicle on selectors for both sales fleets and for mid-level managers,” McClelland said. “The new four-cylinder engine in the 328i contributes greatly to a very positive total cost of ownership, which has allowed it to appear on more selectors than the prior model.”

In the past year-and-a-half, BMW North America has quickly become part of the fleet mainstream. It held its second fleet preview Sept. 25-27, 2012, in Spartanburg, S.C., which included 40 corporate fleet managers and fleet management company representatives. The event commenced with an evening reception that previewed several upcoming models. The next day featured a ride-and-drive of the BMW lineup through the picturesque Smoky Mountains, with a mid-day tour of George Vanderbilt’s Biltmore Mansion in Asheville, N.C.

In addition, attendees were given the opportunity to hone their driving skills at the BMW Performance Center. The half-day event at the Performance Center track included training by professional instructors to develop more advanced driving skills.

Fleet presentations were given on BMW’s global capabilities to assist multinational fleets and an update on the company’s sustainability initiatives, in particular its forthcoming i sub-Brand of products, which will feature the all-electric i3 and the plug-in hybrid i8.

[PAGEBREAK]

Inroads into Commercial Fleets
The BMW Group Corporate Fleet Program is a North American program servicing the overall U.S. and Canadian fleet markets, which allows eligible fleets and drivers to order all BMW Group brand products. Benefits of the Corporate Fleet Program include BMW Ultimate Service, which is no-cost maintenance for four years or 50,000 miles and roadside assistance for four years and unlimited miles. The Corporate Fleet Program is open to companies and to employees on reimbursement or car allowance programs. Approximately 210 BMW dealers have voluntarily enrolled in the Corporate Fleet Program out of a dealer franchise of 300-plus BMW dealers in the U.S. The website, www.bmwusa.com/fleet, provides more details on the program.

One example of a Corporate Fleet Program customer is Merck, which places BMW models on its Canadian and Puerto Rican executive selectors in North America. Merck also has a global agreement with BMW and purchases many of these units for its drivers in Europe. Other significant BMW fleet clients are Red Bull, which operates its signature fleet of MINIs, and Boehringer Ingelheim Pharmaceuticals, Inc., which is a volume buyer in both the U.S. and Europe.

Attending the 2013 fleet preview were executives from the BMW AG corporate headquarters in Munich. Bernd Doepke, vice president, international sales support for BMW Group, and Marty Revel, international key account manager for BMW Group, made presentations on BMW’s global capabilities at the Zentrum Museum adjacent to the BMW manufacturing facility in Spartanburg. Although a late-comer to the U.S. fleet market, BMW has been very active in fleet elsewhere in the world. In Europe, BMW has been competitive in the corporate sales segment for years. For example, at BMW UK, corporate fleet sales account for approximately 50 percent of its business.

BMW Group international corporate sales organization is staffed by international key account managers, who assist in developing an international corporate sales agreement, along with providing support for specific national agreements around the globe. A dedicated international key account manager helps multinational fleets set up business relationships with the global BMW network of subsidiaries and dealers to optimize their companies’ international fleets.

Launch of the BMW i Sub-Brand
A major new product initiative in 2013 will be the launch of the BMW i sub-Brand, which is focused on developing “sustainable mobility solutions.” The i sub-Brand will initially include the BMW i3, a fully electric vehicle, and the BMW i8, a plug-in hybrid. Both vehicles officially debuted at the 2012 Los Angeles Auto Show on Nov. 28. The five-door i3 is slated for global release in late 2013. The i8 plug-in hybrid will debut shortly thereafter in the first quarter of calendar-year 2014.

Featuring environmentally sustainable materials, both models will be built at the company’s so-called “e-plant” in Leipzig, Germany. The completely original “purpose design” i models are not built using existing BMW technologies or design platforms. BMW based both models on construction architecture that the company calls “LifeDrive.” Each consists of two sections, the drive and the life modules.

The drive module, an aluminum chassis, is a single, lightweight compartment that combines the battery and drive system. BMW designed and is building the electric motor that will be equipped in the vehicles.
The life module is the passenger section, which is made completely from carbon fiber reinforced plastic (CFRP), which is corrosion- and rust-resistant and 50-percent lighter than steel, giving the BMW i vehicles a longer lifespan than conventional automobiles.

The plug-in hybrid BMW i8 features the same overall design concept as the i3, including the CFRP life module. The i8’s hybrid-drive module features a plug-in hybrid power plant, giving the driver the option of a gasoline-powered engine for longer trips.

In preparation for the i sub-Brand launch, BMW opened its first i Store in London in June 2012. The i Store dealership will sell only i vehicles. BMW will also open an i Store in New York City that will be integrated with the company-owned BMW of Manhattan dealership. FF