Can Kuhnt get BMW back on track?
Home country: Germany
Previous role: Headed 80-plus BMW Group importer country markets
Other automakers: Worked for Jaguar Land Rover and Mercedes-Benz
Time in the U.S.: More than nine years as Mercedes-Benz USA sales executive and running Mercedes dealerships in California and Arizona
Hobbies: Soccer fan; likes to race and has done the Mille Miglia stamina rally at least three times including in an open-top vintage Jaguar in intense rain
Next-gen BMW X3 to be lighter, suggest M Spectacle trim
With sales in decline and dealers clamoring for more balanced inventory, including more hot crossovers, BMW’s fresh U.S. chief faces a big test: Can he get the brand growing again?
Dealers say they need newer products, a better car-truck mix, competitive lease rates and a come back to the days when BMW’s “Ultimate Driving Machine” tag line resonated wholeheartedly with consumers. They’re looking at Bernhard Kuhnt, CEO of BMW of North America as of March 1, for help.
Kuhnt (KOONT), 49, has a lot of work ahead.
“Bernhard has to take it to the next level and at a time when there’s a lot of things happening – a lot of electromobility discussions going on, a lot of autonomous driving going on, a lot of tech being delivered or developed here,” Ian Robertson, BMW AG board member in charge of global sales and marketing, said in April at the Fresh York auto display. “He’s going to be busy.”
“BMW has indeed lost their mojo,” said Rebecca Lindland, senior analyst for KBB. “They have exceptionally high consideration numbers.”
But the brand isn’t converting as many of those shoppers to buyers as it should, she said. “They’re disappointing people,” Lindland said. “People are looking and telling, ‘There is supercompetitive product out there,’ and choosing something else.”
It has made for a raunchy duo of years for the brand and its dealers.
In 2016, as its U.S. volume tumbled 9.Five percent to 313,174 vehicles, the BMW brand lost the U.S. luxury sales crown it had held for four of the five prior years, falling to third behind Mercedes-Benz and Lexus. It was the thickest decline among luxury brands for the year – as BMW’s incentives soared twenty six percent, according to Autodata.
Even the brand’s most latest sales title, in 2015, was marred by reports of BMW “punching” vehicles, a practice in which automakers ask dealers to self-register vehicles as loaners. Even however BMW finished No. One in reported sales among luxury brands in 2015, it came in No. Three in U.S. vehicle registrations that year, behind Lexus and Mercedes.
One U.S. dealer wants Kuhnt to reconcile the reality of what he calls “punchgate” and BMW’s production-driven culture against the market’s natural request for BMWs and the state of the dealer network. That will better position him to strengthen the brand, said Steve Kalafer, possessor of Flemington BMW in Flemington, N.J.
“It went from the car company of the ultimate driving machine to the company of the ultimate check-the-boxes-and-let-us-report-what-makes-Munich-happy,” said Kalafer, a BMW dealer for forty years. “They’ve all been subordinated to the need to report a number, no matter how unreal that number is, and the customers have found out. Now they come in and say: ‘Is this a punched loaner car?'”
Kalafer, whose dealership group’s eight rooftops sell sixteen brands, said he loves the BMW brand. Tho’ some products have aged, the fresh and redesigned vehicles will be exceptional, he said, “however, it will be exceptional product in a world of exceptional products.”
He hasn’t met Kuhnt but invited him to visit Flemington BMW, a 70-mile drive from BMW’s U.S. headquarters in Woodcliff Lake, N.J. Dealers often don’t tell automaker executives the truth for fear of retaliation, but many BMW dealers “are very unhappy right now,” Kalafer said.
BMW has declined Automotive News’ requests to interview Kuhnt. He likely will do his very first interviews in his fresh role in November at the Los Angeles Auto Showcase, a spokesman said.
Robertson recruited Kuhnt from Jaguar Land Rover in early two thousand fifteen with the plan for Kuhnt to build a network at BMW’s Munich headquarters and then take over one of the big markets. BMW dreamed to send a top person to the U.S., and Kuhnt quickly earned high respect in Munich. With February’s announcement, he went from overseeing more than eighty countries as the head of BMW’s importer markets to leading just one – the company’s second-biggest market worldwide after China.
Kuhnt, a native of Germany, already knows the U.S. From one thousand nine hundred eighty three to 2003, he worked for Mercedes-Benz including a stint as vice president of sales for Mercedes-Benz USA overseeing divisions in Chicago, San Francisco and Los Angeles. From two thousand three to 2009, he headed Mercedes-Benz dealerships in Anaheim, Calif., and Chandler, Ariz. He joined Jaguar Land Rover in 2009.
Are higher sales part of his mission? Eventually, Robertson said. But with U.S. industry sales likely vapid in 2017, it won’t be right away.
BMW is substituting some models in its lineup. The redesigned 5-series sedan went on sale in February, and the redesigned X3 crossover will go on sale this year.
Beyond this year, “of course we want to see the U.S. market grow,” he said. “As we bring a different profile on some of the models – X7 being an significant element that we don’t have at the moment – that will grow the market.”
The X7 large crossover is expected to go on sale in early 2019.
Incentives have moderated in 2017, but BMW brand’s U.S. sales are down Trio.6 percent through the very first five months. That said, BMW has worked to rein in its inventory problems. Punching has subsided however not gone away, several dealers said.
U.S. stock levels have gotten “a little too low,” said Ludwig Willisch, head of BMW Group Region Americas and Kuhnt’s predecessor as U.S. chief. His pending retirement drove the leadership switch.
Willisch turns sixty one in early July – he likened that to being a “fossil dinosaur” in BMW’s world where senior executives typically retire around age 60. Willisch’s departure date hasn’t yet been announced.
Dealers who have spent time with Kuhnt since he took his U.S. role give him high marks: “open-minded,” “down-to-earth,” “knows how to politic and get things done” are typical descriptors. They especially like that he has been in their footwear on the retail side.
“He’s run a dealership – that is very valuable from our perspective,” said Mark Smith, co-owner of Principle Auto, which possesses two BMW stores in Texas.
Smith, a member of the dealers’ aftersales council, wants a better inventory balance. BMW is enhancing its mix of crossovers, which represented 42.1 percent of sales in 2016.
That rose to 46.8 percent during the very first five months. Dealers can’t get enough X1 compact crossovers and are anxiously awaiting the redesigned X3 and the fresh X2 crossover coming early next year.
“It’s mix and content,” Smith said. “It’s a difficult brand because the consumer can order it in so many different ways. That adds complexity you don’t see in a Toyota or Lexus or a Cadillac for that matter. And they got very conservative last year, and they cut back on a lot of inventory. They very likely cut it too brief, and there’s a shortage now. Trucks proceed to grow, and they have to figure out that balance.”
Analyst Dave Sullivan of AutoPacific agrees that the proliferating model lineup is a challenge for BMW dealers: “There are so many figure styles, inbetween GTs, coupes, sedans, crossovers, M versions – it’s terrific for a consumer and can place a cargo on dealers having to finance these vehicles sitting on their lots.”
The brand’s mix in the U.S. has been biased toward cars as the market here has moved rapidly to SUVs and crossovers, he said, but the X1, redesigned X3 and the upcoming X7 will help.
Improving dealer relations and historical bad blood is another challenge.
“Ludwig embarked us on a path to build fine relationships with the dealers, and that hadn’t always been part of their program,” Smith said. “Bernhard has to take the baton and take the next step of the relay.”
Burkhard Riering contributed to this report. ​
BMW dealers look to Kuhnt to get brand back on track
Can Kuhnt get BMW back on track?
Home country: Germany
Previous role: Headed 80-plus BMW Group importer country markets
Other automakers: Worked for Jaguar Land Rover and Mercedes-Benz
Time in the U.S.: More than nine years as Mercedes-Benz USA sales executive and running Mercedes dealerships in California and Arizona
Hobbies: Soccer fan; likes to race and has done the Mille Miglia stamina rally at least three times including in an open-top vintage Jaguar in intense rain
Next-gen BMW X3 to be lighter, suggest M Spectacle trim
With sales in decline and dealers clamoring for more balanced inventory, including more hot crossovers, BMW’s fresh U.S. chief faces a big test: Can he get the brand growing again?
Dealers say they need newer products, a better car-truck mix, competitive lease rates and a come back to the days when BMW’s “Ultimate Driving Machine” tag line resonated wholeheartedly with consumers. They’re looking at Bernhard Kuhnt, CEO of BMW of North America as of March 1, for help.
Kuhnt (KOONT), 49, has a lot of work ahead.
“Bernhard has to take it to the next level and at a time when there’s a lot of things happening – a lot of electromobility discussions going on, a lot of autonomous driving going on, a lot of tech being delivered or developed here,” Ian Robertson, BMW AG board member in charge of global sales and marketing, said in April at the Fresh York auto demonstrate. “He’s going to be busy.”
“BMW has indeed lost their mojo,” said Rebecca Lindland, senior analyst for KBB. “They have amazingly high consideration numbers.”
But the brand isn’t converting as many of those shoppers to buyers as it should, she said. “They’re disappointing people,” Lindland said. “People are looking and telling, ‘There is supercompetitive product out there,’ and choosing something else.”
It has made for a harsh duo of years for the brand and its dealers.
In 2016, as its U.S. volume tumbled 9.Five percent to 313,174 vehicles, the BMW brand lost the U.S. luxury sales crown it had held for four of the five prior years, falling to third behind Mercedes-Benz and Lexus. It was the largest decline among luxury brands for the year – as BMW’s incentives soared twenty six percent, according to Autodata.
Even the brand’s most latest sales title, in 2015, was marred by reports of BMW “punching” vehicles, a practice in which automakers ask dealers to self-register vehicles as loaners. Even however BMW finished No. One in reported sales among luxury brands in 2015, it came in No. Three in U.S. vehicle registrations that year, behind Lexus and Mercedes.
One U.S. dealer wants Kuhnt to reconcile the reality of what he calls “punchgate” and BMW’s production-driven culture against the market’s natural request for BMWs and the state of the dealer network. That will better position him to strengthen the brand, said Steve Kalafer, holder of Flemington BMW in Flemington, N.J.
“It went from the car company of the ultimate driving machine to the company of the ultimate check-the-boxes-and-let-us-report-what-makes-Munich-happy,” said Kalafer, a BMW dealer for forty years. “They’ve all been subordinated to the need to report a number, no matter how unreal that number is, and the customers have found out. Now they come in and say: ‘Is this a punched loaner car?'”
Kalafer, whose dealership group’s eight rooftops sell sixteen brands, said he loves the BMW brand. However some products have aged, the fresh and redesigned vehicles will be exceptional, he said, “however, it will be exceptional product in a world of exceptional products.”
He hasn’t met Kuhnt but invited him to visit Flemington BMW, a 70-mile drive from BMW’s U.S. headquarters in Woodcliff Lake, N.J. Dealers often don’t tell automaker executives the truth for fear of retaliation, but many BMW dealers “are very unhappy right now,” Kalafer said.
BMW has declined Automotive News’ requests to interview Kuhnt. He likely will do his very first interviews in his fresh role in November at the Los Angeles Auto Display, a spokesman said.
Robertson recruited Kuhnt from Jaguar Land Rover in early two thousand fifteen with the plan for Kuhnt to build a network at BMW’s Munich headquarters and then take over one of the big markets. BMW desired to send a top person to the U.S., and Kuhnt quickly earned high respect in Munich. With February’s announcement, he went from overseeing more than eighty countries as the head of BMW’s importer markets to leading just one – the company’s second-biggest market worldwide after China.
Kuhnt, a native of Germany, already knows the U.S. From one thousand nine hundred eighty three to 2003, he worked for Mercedes-Benz including a stint as vice president of sales for Mercedes-Benz USA overseeing divisions in Chicago, San Francisco and Los Angeles. From two thousand three to 2009, he headed Mercedes-Benz dealerships in Anaheim, Calif., and Chandler, Ariz. He joined Jaguar Land Rover in 2009.
Are higher sales part of his mission? Eventually, Robertson said. But with U.S. industry sales likely plane in 2017, it won’t be right away.
BMW is substituting some models in its lineup. The redesigned 5-series sedan went on sale in February, and the redesigned X3 crossover will go on sale this year.
Beyond this year, “of course we want to see the U.S. market grow,” he said. “As we bring a different profile on some of the models – X7 being an significant element that we don’t have at the moment – that will grow the market.”
The X7 large crossover is expected to go on sale in early 2019.
Incentives have moderated in 2017, but BMW brand’s U.S. sales are down Three.6 percent through the very first five months. That said, BMW has worked to rein in its inventory problems. Punching has subsided tho’ not gone away, several dealers said.
U.S. stock levels have gotten “a little too low,” said Ludwig Willisch, head of BMW Group Region Americas and Kuhnt’s predecessor as U.S. chief. His pending retirement drove the leadership switch.
Willisch turns sixty one in early July – he likened that to being a “fossil dinosaur” in BMW’s world where senior executives typically retire around age 60. Willisch’s departure date hasn’t yet been announced.
Dealers who have spent time with Kuhnt since he took his U.S. role give him high marks: “open-minded,” “down-to-earth,” “knows how to politic and get things done” are typical descriptors. They especially like that he has been in their boots on the retail side.
“He’s run a dealership – that is very valuable from our perspective,” said Mark Smith, co-owner of Principle Auto, which possesses two BMW stores in Texas.
Smith, a member of the dealers’ aftersales council, wants a better inventory balance. BMW is enlargening its mix of crossovers, which represented 42.1 percent of sales in 2016.
That rose to 46.8 percent during the very first five months. Dealers can’t get enough X1 compact crossovers and are anxiously awaiting the redesigned X3 and the fresh X2 crossover coming early next year.
“It’s mix and content,” Smith said. “It’s a difficult brand because the consumer can order it in so many different ways. That adds complexity you don’t see in a Toyota or Lexus or a Cadillac for that matter. And they got very conservative last year, and they cut back on a lot of inventory. They most likely cut it too brief, and there’s a shortage now. Trucks proceed to grow, and they have to figure out that balance.”
Analyst Dave Sullivan of AutoPacific agrees that the proliferating model lineup is a challenge for BMW dealers: “There are so many assets styles, inbetween GTs, coupes, sedans, crossovers, M versions – it’s breathtaking for a consumer and can place a cargo on dealers having to finance these vehicles sitting on their lots.”
The brand’s mix in the U.S. has been biased toward cars as the market here has moved rapidly to SUVs and crossovers, he said, but the X1, redesigned X3 and the upcoming X7 will help.
Improving dealer relations and historical bad blood is another challenge.
“Ludwig commenced us on a path to build excellent relationships with the dealers, and that hadn’t always been part of their program,” Smith said. “Bernhard has to take the baton and take the next step of the relay.”
Burkhard Riering contributed to this report. ​