Do The Premium GERMAN Automakers Have TOO MANY Models In Their Portfolio Or Is The Diversity GOOD For Biz?

Oh-kay, so, there's an elephant in the room. My daddy always told me that if there's such a situation, the best thing to do is address it.

The luxury German automakers have all seen a SIGNIFICANT increase in the way they have been slicing and dicing their product portfolio. We've seen the introduction of four-door coupes and four-door coupe sport-utility vehicles. In addition, we've seen the implementation of hybrid and all-electric vehicles. We haven't even gotten to the diesel variants. Oh, and how about the all-wheel drive models that risen to success since Audi's dominance?

We're living in pretty remarkable times, no doubt about that. Some would argue that cars are more complicated than jets these days and although 2014 was rife with recalls, I'd say that overall automobiles are the best they've ever been.

BUT, are there TOO MANY models in the Germans product portfolio?

One could say the industry adage "there's an ass for every seat," but at the same time when I look at the BMW 3-Series I see a whole lot of cars that aren't selling.

- How many ActiveHybrid 3-Series have you seen?
- How many 3-Series diesels have you seen?
- How many 320i's do you see?
- How about the 3-Series wagon?
- How about the 3-Series Gran Turismo?

Keep in mind this is a volume product. I could point to the plethora of niche cars these companies are producing.

So, what say you?

llaroo - 12/14/2014 9:01:23 PM

+2 Boost

BMW is rediculous. 3 series, M version, 3 series GT, 4 series, 4 series GC,
x4, WTF ? too much emphasis on expansion and they all look like hillbilly cousins.

Car4Life - 12/15/2014 12:11:22 AM

+1 Boost

Today's world requires companies, regardless of industry, to eat or be eaten. Fast food restaurants expanding breakfast/lunch/dinner menus, television networks blurring the lines between news/politics/sports/entertainment/pop culture, and tech companies going beyond computers to tablets/mobile/smart phones/ wearable gadgets, and yes luxury manufacturers plugging every hole in their line up they can because the last thing they want is to send that random customer looking for a diesel compact luxury sedan elsewhere....

If you don't eat your lunch...no matter how rare the meal maybe....someone else will

chewy - 12/15/2014 3:25:14 PM

+1 Boost

True. These days you can't be stuck in doing the same thing as you always did and be afraid in expanding. Doesn't mean that it will always succeed though.

JDMUSMuscle - 12/14/2014 9:27:28 PM

0 Boost

They have increased the number of their models way too radically in the past 2 years and it's not really a good sign I would say.

They really need to learn from the Japanese and the Americans.

But then again, it doesn't really matter because most of the world is still the Europe worshippers.

MDarringer - 12/14/2014 10:29:06 PM

-3 Boost

There is NOTHING wrong with the product diversity so long as the models are profitable and they are willing to kill models the nanosecond they are not. This is very similar to the Detroit Big Three's business model in the roaring 1960s, but they kept too many models and brands alive when the market slowed.

That said, the proliferation of models is a bit much.

mre30 - 12/14/2014 10:43:18 PM

-1 Boost

I took my kid to McDonalds today on the way to his Lacrosse game and I was completely blown away by the gigantic number of things on the menu. Perhaps McD's is not the demo of Autospies - but next time you drive by one, take a cruise thru the drive-thru and get a coffee - the drive thru menu board is GIGANTIC.

Then go home and check out BMW's 3-series configurator - the variety is GIGANTIC too.

BMW has two many products and there may be some creative accounting behind the scenes as I have no idea how they can make the economics of their product offerings work in a profitable fashion. Your point is spot-on.

cidflekken - 12/14/2014 10:58:15 PM

-1 Boost

As long as it's profitable and promotes brand growth, then there's no faulting it.

When I did a recent count of models offered by brand, BMW, by far, had the highest. A single offering was based on its model, body type, and drivetrain offered. Packages and options were not considered. So as an example, a 328i, 335i, 328i xdrive, and a 335i xdrive would have been 4 separate offerings.

The breakdown (about a month ago) was as follows:

BMW
Non-M offerings 83
M offerings 7

Audi
Non-RS offerings 42
RS offerings 3

Mercedes
Non-AMG offerings 35
AMG offerings 16

Lexus (not including RC, RC-F, NX)
Model offerings 33

Acura
Model offerings 11

MDarringer - 12/14/2014 11:30:04 PM

0 Boost

I'm psychic. I see an implosion.

Benzes1 - 12/15/2014 12:11:08 PM

+1 Boost

You don't know what you're talking about as usual.

w222 - 12/15/2014 2:43:12 AM

0 Boost

There's nothing wrong with offering variety to customers. They key word being variety.
If there is not much differentiating factors between models- namely same thing in different sizes, then there is too much redundancy.
Look what happened to Samsung when they spew out too many similar looking/spec'd phones.

chewy - 12/15/2014 3:07:06 AM

0 Boost

In Europe all the brands have like triple the engine options, the US usually only gets the most powerful ones so it's not something that the brands fear or aren't used to.

joescuba - 12/15/2014 12:22:21 PM

+1 Boost

To many models it requires high inventory in the sales lots and manufacturing plant which leads to higher costs and prices.

leej - 12/15/2014 1:18:30 PM

+4 Boost

BMW has too many...too many that look alike. They are the least innovative, stylistically. Some of their 'performance' focus has been compromised recently too, not to mention mediocre reliability overall. Total cost of ownership prevents this group from being a value leader on any level.

Visiting a BMW dealership forces you to walk behind all vehicles to read the model number...they are that indistinctive.

GermanNut - 12/15/2014 9:32:44 PM

+1 Boost

BMW's huge product expansion with little differentiation between models and strategy of creating market niches where there is basically no market is a bad strategy. Yes, it makes sense to keep producing models if they are profitable, but BMW's overlap is clearly cutting into sales of its models.

As pointed out, this creates higher manufacturing costs, an oversupply of vehicles on dealer lots, more aggressive discounting in order to move volume and reduced profitability.

The effect are already being seen. BMW's current CEO, Norbert Reithofer, agreed to step down earlier than expected in May of 2015. A big reason behind this was BMW's net profit dipped in the third quarter, falling 1 percent to 1.3 billion euros, or about $1.6 billion.