BMW 5GT Tragedy

I don’t like to write these types of articles but recently I noticed that, I should do it. Last year, there are two things were revealed to humankind! Apple iPad and BMW 5GT. For both of them, it was unclear why you need one these things. Apple has the iPhone and Macbook series, why a tablet? Because, they found a very good niche market to fit their product and also Apple has consumers who are addicted to Apple. This is a very very very very big plus for introducing new products, because your customers are ready to consume. Anyway, iPad became a phenomenon and created a new segment and other brands also followed it. It is similar to Mercedes M Class in 1997, they created the SUV and BMW made the money :)

Let’s go back to BMW 5GT case! BMW also thought that, we can introduce a new car and people can buy it. There were very solid reasons but on paper! There are some people who don’t like normal 5 Series, because it is too low and they also don’t like X5 because it is too high. They want something in the middle. Something like car and SUV, something very unclear. And they did it and called 5 GT which totally collapsed with Grand Tourer concept. GT means, a luxury coupe for long journeys, not a car with a huge boot and raised up suspension.

As I mentioned it was great on paper but unfortunately those people are only on paper. 5GT was a very unclear car and people could not identify its purpose, similar to Mercedes R Class and Audi A6 Allroader. These cars are excellent machines but their potential customers are extremely niche. I am not saying there is a no demand exists and BMW created a parallel universe for 5GT. There are some existing demand for this type of cars but it is extremely niche. And the problem is the gap between 5 Series and X5 and 7 Series are not that big and people are not researching about cars on Google (We know what they search on Google). So, they cannot identify the 5GT and it ended up with a very weak demand.

Recently, BMW announced that the demand for 5GT was far below the expectations. Honestly, nobody was surprised with this news. We were expecting to hear this. I don’t like to say this but I said this exactly one year ago. And I am sad to see that 5GT is very close to failure.

My opinion, consumers perceive a vehicle based on its physical appearance and design. When they cannot position the vehicle properly and if it does not offer something extremely different, people don’t buy it! 5GT is more comfortable than 5 Series and easier to drive in city than X5 and 7 Series but people does not think this deep and this way. They mostly think, ohh 5GT looks like an SUV but it is not as good looking as X5 or X6, so why I should buy it? Moreover, it looks similar to 5 Series, again why I should buy it? In order to success a car, consumers should have a clear meaning or identification for it and they should not find it too similar to other cars with the same brand.

Mercedes did these types of mistakes with R Class, B Class and Smart series and failed! Unfortunately, automotive industry does not have Apple style brand addictive consumers. Even though, the existing the people most of the time cannot afford to buy the product.

(BMW 5GT in US market moved some of the demand from 7 Series to 5GT.)