Why small cars are still important: German brand's battle to keep sales of BMW 1 Series and X1 growing by pricing them below rivals such as Audi Q3 and A3, Mercedes-Benz A-Class and GLA

BMW Australia is confident there’s still a need for small cars in the local market, citing the success of the X1 SUV sales.

While rival brands are down between around 15 to 20 per cent on sales in 2024, BMW Australia has held steady in a difficult market, recording a small 1.3 decrease in sales compared to last year.

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Prabs Datar, Product and Pricing Manager for 1, 2, 3 and 4 Series, told CarsGuide the new 1 Series followed the formula of the X1 in terms of spec and aggressive pricing.

“It was a tough battle, but when we presented our plans to our management and up to Munich, they understood our position,” he said.

“They saw the potential that we had with keeping it close to where it should be.”

At $56,500 before on-roads for the entry grade 118, the fourth-gen 1 Series is less than $2000 pricier than its predecessor to get into, while the M135 xDrive variant is $82,500, competitive but more expensive than before by almost $6000.

“The initial [1 Series] spec, we pretty much copied the blueprint of what we did for X1,” Datar said. 

“We loaded that car up from the ground up, so it just made sense to do the same for the 1 Series. [The X1] showed good reviews and good sales growth.”

Brendan Michel, BMW Australia’s Head of Product and Market Planning added that the X1’s success was the example they presented to Munich to move forward with the plans for 1 Series.

“In fact, the X1 argument really helped us, actually, because it launched really well for us,” he said.

“Good feedback from dealers and customers, especially dealers, over the moon with what we did with the spec and packaging, especially at the base on the level.

“I mean, surround view cameras, the full radar cruise control, everything at the entry level. It was important for us to get that.”

He also said even though BMW isn’t expecting the 1 Series to follow the same sales pace as X1, offering the hatchback to customers is important for BMW as a brand.

“We’re not going to be seeing double digit growth of 1 Series in the next couple of years. It’s important, I mean it’s the entry level into the brand for us as well so it’s an important car.

“I know we’re seeing a strong switch to SUVs in our market. We're seeing it in our own portfolios. Last time I checked, it was 69 per cent SUV year-to-date.

“In saying that, there's definitely still demand for the hatch segment, especially the hot hatch segment in our market. There's a [customer base] that has a strong love for that segment.”

On 1 Series, he said BMW’s expecting a steady interest in the model, while X1 remains a sales success for the brand’s expectations.

“It is, I won't say diminishing, but I'd say on this new generation, we'll be on par with the volume we did last year. 

“But definitely things like X1, which is the entry level SUV for us, is doing really, really well for us at the moment.”