Even though it has years of fleet experience in Europe — at one time the U.K. accounted for half its business there — BMW didn’t enter the U.S. fleet market until 2010.
The irony was that there were numerous U.S.-based corporations that relied on BMW for their fleet needs in Germany and the U.K. “It was a bit of an anomaly,” says Drew McClelland, corporate sales manager, BMW North America. “We looked at what the competition was doing — Mercedes-Benz and Audi — and we felt we had to be in the fleet market. Now that we’ve entered the fleet market, there’s no turning back.”
EPP Lifts Off
In 2010, BMW North America launched its Executive Preference Program (EPP) as its official entry into the fleet market.
The EPP is a fleet program for the U.S. and Canada that allows eligible fleet drivers to order BMW and MINI-brand products. Benefits of the EPP 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 EPP is open to both companies and employees on reimbursement or car allowance programs.
McClelland expects to see the program grow over the next several years. His target is up to 5,000 vehicles per year, and a dedicated sales force is ready to help build the program.
“I think it’s natural to move into fleet sales,” McClelland says. “But, we’ll only do it on the basis that’s profitable and makes sense. Our fleet sales will be done in a very controlled way because we don’t want to damage BMW brands’ residual value, which is one of our strengths.”[PAGEBREAK]
2012 Fleet Forecast
With about 60 percent of its 2012-MY products being new, this could be a big year for BMW in the U.S. fleet market.
The company’s next big launch in fleet is the new 3-Series, which, according to McClelland, is the automaker’s most important model for the U.S. market.
The 5-Series will also be available for fleet, with the 528xi available in October. The new M5 “halo car” moves from a V-10 to a V-8 engine and will be 25 percent more fuel efficient than its predecessor.
BMW first entered the electrics market with the MINI-E, which McClelland says was significant because it showed range anxiety wasn’t as big an issue as expected. He says other lessons were learned as well from ActiveE, which is based on the 1-Series Coupe, and is expected to hit the market in late 2011 worldwide.
The ActiveE will act as the precursor to a new line of electric and hybrid-electric vehicles slated to roll off assembly lines beginning in 2013 — the “i” sub-brand.
‘i’ Follows ‘E’
The initial offering of the i sub-brand will include the BMW i3 fully electric vehicle, and the BMW i8, a plug-in hybrid.
The BMW i3, formerly known as the MegaCity Vehicle, is designed as a means of local conveyance and to integrate into public transportation systems. The i3 is particularly significant because it “will be the first in the market that will be designed from the tires upward as an electric vehicle,” according to McClelland.
The plug-in hybrid BMW i8 features the same overall design concept as the i3, though the i8’s plug-in hybrid power plant gives the driver the option of a gasoline-powered engine for longer trips.
McClelland is bullish on the impact of these two vehicles. “We will create the ‘Prius’ of the electric car market with the i3,” he says. “It has an iconic look, with a very eye-catching interior and exterior. Likewise, the i8 will be a stunning car.”