Thursday, December 09, 2004

The Amazing Advance of Mass Luxury

by Tom Bozzo

The Wisconsin State Journal reports that the local BMW dealership is moving in January. A serendipitous shared cab ride (*) from the old location — which would not have happened if the Saturn and pan-European stores were not co-located — greatly hastened the end of my single days and subsequent life changes. So the current location is somewhat special to me, even if there may be benefits from not having to jockey for space in the service department with Mercedes people.

Then this bit of Madison auto sales history jumped out from the article:

"When we first purchased the BMW franchise from Tom McGann and Jon Lancaster in 1991, they had two locations in town, but were only selling about 18 new BMWs per year in Madison," [Tom] Zimbrick said. "This year, we're on track to sell roughly 300 new BMWs and about 100 used, which is 14 percent better than we did in 2003."

BMW sales in the U.S. as a whole have increased dramatically over the time period in question, along with rapid growth of the broader market for high-end cars, but not by anything approaching a factor of 15. I found Zimbrick's explanation interesting:

"For some reason, Madison luxury car buyers have traditionally been more import- oriented than domestic- oriented when it comes to buying premium-priced vehicles," he said. "Over the past 15 or 20 years, our European and Asian high performance and luxury models have experienced a steady sales increase."

My gut is that this gets at the first derivatives of the changes in the area's car market, but as to levels, the question is "more import-oriented" than what — the surrounding Midwest, I'd gather. When I arrived here, this was not my impression at all. Compared to the Washington area, which was almost as import-besotted as the west coast, I thought Madison was awash in domestic cars at both ends of the market. That is, you'd see Saturns driven by young people instead of Hondas or Toyotas (though I thought at the time that the Acura Integra was a good candidate for Official Car of Madison, since displaced by VW and Subaru models), and Cadillacs driven by people who were not obviously retired.(**)

I doubt that changing tastes account for much of the 15-fold BMW sales increase, though. I think much of the credit there must go to technology and product advances. First, the adoption, starting in the mid-to-late 90s, of traction and stability control systems greatly improved the compatibility between BMW's rear-drive models and local winter driving conditions. Second, the introduction all-wheel-drive models (including SUVs) couldn't hurt. A majority of the spec 3's on the showroom floor, I gather, have been AWD "xi" models. Both allow us BMW folk to satisfy our tastes or, as the case may be, pretensions without risking life and limb five months of the year.


(*) Cab rides to work for customers without alternative arrangements are included in the price of service at the dealership group.

(**) The other conspicuous feature of the local car scene was the absence of most older cars, presumably reduced to iron oxide from winter road salting.
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