BMW Aims to Keep Rivals in Rear-View Mirror

For 2011, BMW has an 8,000-car lead on Mercedes-Benz for the privilege of supplanting Lexus as the best-selling luxury brand in the United States. And now its executives are expressing confidence not only about this year's race but also about getting off to a fast start in the 2012 upscale-sales derby.

"We have a window to stay No. 1 in the first quarter" of next year, Ludwig Willisch, who took over BMW's North American operations, told Bloomberg this week. His confidence comes in part because BMW is introducing a new 3-Series sedan, an updated version of its classic entry-level vehicle that hits the sweet spot for Millennials who want to move up into the luxury niche. BMW has introduced a redesigned 5 Series sedan and X3 sport-utility vehicle over the last year.

His remark contradicted a view offered in August by his predecessor, who believed that Mercedes — also on the strength of new-product launches — might take a first-quarter lead. Neither did Willisch address the rest of 2012. One factor that he and competitors are acutely aware of is that Lexus is beginning its return to ample supplies of all vehicles this quarter, and by early next year expects to be flush with all of the Lexus vehicles that its highly loyal customers want to buy.

In the meantime, BMW, Mercedes, Cadillac and other rivals have been trying very hard to pick off Lexus owners who have grown impatient over the last several months waiting for dealers' supplies to recover from the natural disaster in Japan in March. Mercedes-Benz, for instance, reached an "unprecedented" level of luring customers from Lexus in the third quarter, Steve Cannon, vice president of marketing for Mercedes-Benz USA, told brandchannel. "Quarter by quarter, we have turned around this relationship 180 degrees, from where the bucket was leaking, to where we're now filling it," he said.

And of course, Lexus executives are chomping at the bit to stop such conquests. In 2012, "We'll have one of the most robust years ever for new-product introductions," Brian Smith, vice president of marketing for Lexus, told brandchannel.

Luxury-car buyers already have been enjoying generous fourth-quarter deals, a situation that should get even better as the segment nears its traditional blitz of winter-holiday promotions. And with all these competing brands getting so lathered up, maybe the fun will continue for consumers well into 2012.