BMW, Mazda Execs Predict Recovery in Second Half of 2009

Joshua Duval
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Despite grim April sales, a BMW executive and a Mazda executive said in separate interviews that their respective companies expect to see the market bounce back in the second half of 2009.

Speaking with Automotive News, BMW's U.S. CEO, Jim O'Donnell, said that the BMW brand will see at least ten percent growth over the previous year starting in September. He said the growth would continue through the final quarter, but Mini would remain flat in the last four months of the year. O'Donnell expects the redesigned 2010 7-Series to lead the charge come September, continuing its 1000-sales-per-month average from last year.

"By the end of the year, it will lead the segment. We are not shooting for gold, but to put this car into the market without a lot of sales allowances. If that means we do 1000 a month, so be it."

But so far, the 7-series hasn't been selling that well. Although the redesigned model didn't go on sale in the U.S. until March and the lineup is missing its notorious V-12 engine, sales are down 67 percent for the four months this year compared with the same time period last year. BMW's dealers moved 792 units in April. If BMW wants to replicate last year's sales average - or beat it - sales will have to increase significantly.

O'Donnell said BMW is happy keeping the 1-series as a niche model in the U.S., defending the automaker's choice to introduce the small car with a high price.

"One of the reasons we positioned it as we did was the dollar was particularly weak. Having pitched it at that level, we think it would be inappropriate to try and adjust that. We are happy enough with the 1-series being a niche model, concentrating mainly on people who want a small car with a degree of fun in it."

In a separate interview with Automotive News, Mazda's North American Operations CEO, Jim O'Sullivan, said that he predicts the seasonally adjusted annual rate for the year will rise to 10 million, meaning sales will have to pick up significantly during the second half of the year. "We are going to clean everything up before we get to September," O'Sullivan said.

O'Sullivan also revealed that Mazda's research and development and product cycle did not see budget cuts. He said Mazda is working on lowering fuel consumption by 30 percent across the board by 2015, designing gas engines that get diesel mileage and diesel engines that get hybrid mileage.

The Mazda2's possible entry into the North American market was also discussed. It seems Mazda is seriously considering the Mazda2 for the Canadian market - but there was no mention of the Mazda2 for U.S. consumers. O'Sullivan said he didn't think the Mazda2 would cannibalize sales from its best seller in North America, the Mazda3.

Although we think it's just too early to predict when sales will make a recovery, making an educated guess about future growth rates are part of the job descriptions of CEOs like O'Donnell and O'Sullivan. We hope their predictions hold true.

Source: Automotive News

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