BMW’s New 3-Series – More Power and Improved Fuel Efficiency

In an effort to retain its position as the world’s largest premium carmaker, BMW has launched a new 3-Series entry-level sedan, which began appearing in U.S. dealer showrooms this weekend.

Daimler AG’s Mercedes-Benz, Volkswagen AG’s Audi, General Motors Company’s Cadillac and Toyota Motor Corporation’s Lexus are all vying for a greater share of the U.S. premium automobile market. Last year, BMW surpassed Mercedes in U.S. sales and replaced Lexus as the top-selling luxury brand in the U.S.

BMW North America CEO Ludwig Willisch said, “Ever since we came out with the 3-Series we were very successful, so we’ve been hunted for a long time. We are used to that.” The 3-Series was first introduced in 1975.

In September, Mercedes launched an updated C-Class sedan which edged out BMW 3-Series sales by 500 units by year’s end. Last month, Mercedes’ U.S. sales surged 24 percent to 20,306 units, and Lexus has set a goal of selling 250,000 vehicles this year. In January, BMW’s U.S. sales increased by 3.1 percent to 16,405 units.

Volkswagen AG’s premium Audi division plans to launch an updated A4 in the U.S. by mid-year. Last week, Audi was cited by Kelly Blue Book as having the lowest cost of ownership of any premium brand in its first-ever Cost of Ownership survey.

General Motors Company’s Cadillac division is also stepping up its game and plans to introduce its new compact ATS luxury model during the third quarter.

Willisch says he expects U.S. sales of the 3-Series to increase by upwards of 10 percent this year.

Sanford C. Bernstein analyst Max Warburton says the 3-Series has generated revenue of $290 billion for BMW since its introduction in 1995. In a November 15 report, Warburton wrote that the 3-Series “is one of the most profitable vehicles ever, thanks to big volumes and good prices.”

The new 3-Series will mark the first upgrade to the model since 2005 and will deliver more power and greater fuel efficiency than the current model. The new 3-Series will reportedly deliver 28 mpg combined city/highway from its 4-cylinder engine teamed with a new eight-speed automatic transmission with start-stop technology.  The current 3-Series comes with a six-cylinder automatic transmission.

BMW says the entry-level 3-Series model, the 328i, will deliver 10 more horsepower than the current model.

Next September, BMW will roll out an all-wheel-drive version, and a hybrid version is also in the works. Willisch expects hybrid sales to account for less than 10 percent of total sales.

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