Luxury brands build networks

The spread of the dealer network aims to keep up with demand caused by a booming population and Australia's strong economy.  Within two years, BMW will see $40 million spent on new or refurbished outlets as it shoots for 50 national dealerships.

These include a second dealership in Perth ($15 million), expanded Doncaster (Victoria) premises ($10 million), a North Shore Sydney franchise ($8 million) and a new dealer at Tweed Heads.  The Perth dealership, to be built this year by the existing franchisee, is in the city's expanding northern suburbs.

BMW Australia managing director Stavros Yallouridis says the expansion reflects the mechandising concept that takes the product closer to the buyer.  "We are, to a degree, a product for the impulsive buyer," he says.

"We have to go to the buyer and that redefines the distribution of our products. In many cases, as we expand our products with smaller cars, we have to be in city areas that demand small cars in order to sell to our target market."

Yallouridis says the car market was aiming for record highs and, in BMW's case, highlighted by the 1-Series, X1, 5-Series and 7-Series.
"The X3 comes in next year and there's the 1-Series hatch and coupe, so sales will expand further," he says.

The Audi Centre in Perth is more than doubling its floor area, taking over a neighbouring property in the high-end car retail suburb of Osborne Park. The suburb also hosts Ferrari, Lamborghini, Lexus, Jaguar and Mercedes-Benz.

The additional building will accommodate the new 26-car showroom - effectively 2.5 times bigger than present - to display one of each of Audi's models.  Dealer principal David Collins says the investment of about $15 million was necessary.

"The customers demand it and we desperately need the space because of the growth in Audi sales," he says.  "In 2004 we had 120 new car sales. Now we have 1050.

"Audi's sales are higher than BMW's when you take out the SUVs.  "I've ordered 250 units of the A1 for 2011 because of demand."  Collins says the Q5 was "the most successful car I've ever been involved with".

He says it reflects the growing trend of buyers seeking to downsize their cars yet retain quality and luxury.  BMW has recorded a 10.4 per cent national sales growth year-to-date and, with global sales this calendar year of 775,000, has surpassed Mercedes-Benz (735,000) and Audi (726,000).

It has since January sold 1156 of its baby X1 SUV - now its third most popular single-body seller after the 3-Series (3326) and X5 (1955) - for 2 per cent of Australia's passenger-car market.

Audi has 1.7 per cent of the car market, primed by sales year-to-date of 1458 A3s and 2521 A4s, and Mercedes-Benz has 2.6 per cent thanks primarily to its E-Class stranglehold of the $70,000-plus large luxury car sector and the robust 4242 C-Class sales.