DATE=03/31/02

TYPE=BACKGROUND REPORT

TITLE=BMW 3-SERIES

NUMBER=5-51350

BYLINE=JOHN BIRCHARD

DATELINE=WASHINGTON

INTERNET=YES

CONTENT=

INTRO: The so-called "entry luxury" segment - cars with a base price from 30- to 35-thousand dollars - is the hottest part of America's auto sales picture. And, reports VOA's John Birchard, one brand more than any other is the standard by which all other manufacturers measure their entries in this field.

TEXT: Germany's BMW stands at the top of the automotive heap in the compact sports sedan category. The popular auto enthusiast magazine Car & Driver has voted the BMW 3-Series to its "Ten Best" list for eleven consecutive years.

Car & Driver's Technical Director Frank Markus provides a reason for the 3-Series' success.

/// MARKUS ACT #1 ///

For one thing, it is rear-wheel drive. And, for a fun car to drive, a handling-oriented car, that is the preferred set-up. It divides the labor so the front wheels can concentrate on turning and the back ones on pushing.

/// END ACT ///

Another factor, says Mr. Markus, is what percentage of the car's weight is distributed between front and rear wheels.

/// MARKUS ACT #2 ///

I have four comparison tests arrayed in front of me and, in each one, the 3-Series is the closest to the perfect, fifty-fifty weight balance. In fact, in some cases, depending on model, it will be a little bit biased toward the rear, which is also really crucial to getting a car to turn and handle the way you want.

/// END ACT ///

Despite an ever-growing number of competitors in the market segment, including entries from Jaguar, Volvo, Audi and Mercedes-Benz, BMW's Dave Buchko (pron: "butch-ko") says his firm sold over 103-thousand 3-Series cars in the United States last year, a company record.

/// BUCHKO ACT #1 ///

It wouldn't appear, at least from our side, that the new competitors have really had a serious impact on 3-Series sales.

/// END ACT ///

That is not just the company line. The managing director of Nextrend, a California-based marketing and research firm, Christopher Cedergren, says BMW has a very strong position in the market.

/// CEDERGREN ACT #1 ///

The segment is growing fast enough that it certainly is not going to remove any business from BMW, especially as long as it remains the bench-mark of the segment. We would see other competitors being hurt first before the 3-Series.

/// END ACT ///

BMW has expanded its model line to include not only a sedan and coupe, but also a convertible and sport wagon. Dave Buchko says the series commands a wide price range.

/// BUCHKO ACT #2 ///

It's pretty broad, actually. It goes from about 27-thousand dollars, which would be the base price for our 325-I Sedan, and, if you go all the way up to our M-3 convertible, then you are up around 54-thousand dollars.

/// END ACT ///

Not cheap, certainly. But Christopher Cedergren says research indicates plenty of customers are available to spend that kind of money.

/// CEDERGREN ACT #2 ///

There is a whole new generation of consumer out there that is moving into adulthood and is large in terms of their numbers, but they also have high affluence at a young age.

/// END ACT ///

The Wall Street Journal newspaper calls BMW "one of the most profitable automakers in the world". With popular lines like the 3-Series - and a growing group of consumers to tap - it appears the company that boldly advertises its products as "The Ultimate Driving Machine" has a strong future. (Signed)

NEB/JJB/FC