BMW eclipses car show rivals with 3-level indoor test track

Reuters

By Andreas Cremer

FRANKFURT (Reuters) - BMW (GER:BMW) has built a 300-metre, three-level indoor test track at this year's Frankfurt motor show - all to outshine German arch-rivals Audi and Mercedes-Benz as it battles to stay in pole position in the world's luxury car market.

Incorporated into BMW's 10,000-square metre exhibition space, the figure of eight-shaped track will give visitors the chance to test drive two dozen vehicles, including BMW's first all-electric car, the 34,950-euro i3 hatchback.

"We're keen to live up to our leadership claim in every possible respect," Steven Althaus, BMW branding chief told Reuters. "That central idea is reflected through our show stand" which took two months to build.

German premium carmakers traditionally compete against one another for the most impressive display during the Frankfurt show, Europe's biggest, but BMW is particularly hard-pressed to turn heads this year as its sales lead over Audi has been melting away.

Competition among the big three has intensified since Mercedes (GER:DAI) was overtaken by Audi (GER:VOW3) in 2011 as the runner-up in the luxury car market by sales.

Both want to replace BMW in the top spot by the end of the decade and are also determined to make a splash in Frankfurt.

Audi has pledged "to turn the show upside down" by having imitations of skyscrapers and city districts sprout from the ceiling of its partly mirrored exhibition pavilion, drawing attention to the challenges of urban mobility, the brand's event marketing chief, Bernhard Neumann, told Reuters.

Mercedes, meanwhile, has a 250-metre track outside the Festhalle, the century-old venue for the show which was inaugurated by German Emperor Wilhelm II and has space for 13,500 people.

"It's totally obvious that we're eyeing each other," said Andreas von Wallfeld, Mercedes' event communication chief.

"Frankfurt is by far the top show for the German premiums. It's that mutual competition that spurs us ahead in the global sales race."

"THE MONEY'S WORTH IT"

BMW outsold Audi by 85,000 cars last year, but Volkswagen-owned (VW) Audi's steady progress in China and North America shrank the margin to no more than 21,000 at the end of July.

Daimler-owned Mercedes, meantime, has reinforced its global ambitions by pushing design updates and compact models while fixing distribution problems in China.

BMW was the first of the three top German brands to allow visitors to test its cars in action at the 2009 Frankfurt event. The show, which has been held since 1899, is key to Germany's flagship nameplates, with BMW, Audi, Mercedes and Porsche all headquartered within 400 kilometres of the Frankfurt fair.

"The money's worth it, no matter how expensive their show stands are," said Frankfurt-based IHS Automotive analyst Christoph Stuermer. "Every minute a customer spends inside a hall means face time for the exhibitors. No dealership on earth works that efficiently."

Some 928,100 people visited the previous 2011 Frankfurt fair, almost 10 percent more than in 2009.

BMW expects to see cars putting in over 5,600 miles on its test track over the course of the 13 show days from September 10-22.

The project is based on a multi-million euro budget, two people familiar with BMW's show preparations said on condition they not be identified because the details are confidential.

About 70 models will be on display, such as the i8 plug-in hybrid sports car and the all-new 4-Series coupe.

BMW will also be hoping the i3 will take a big step towards winning over consumers to electric cars, which have come under criticism for their cost and limited driving range.

The model, based on an estimated $2.7 billion investment programme, could wrongfoot Audi which scaled back electric plans after VW decided to promote plug-in hybrids.

Forecasts suggest BMW is up to the challenge of its rivals.

BMW brand sales may surge 44 percent to 2.20 million vehicles by 2020 from last year's 1.53 million, compared with 27 percent growth at Audi to 1.86 million, according to research firm IHS Automotive.

Mercedes may narrowly eclipse Audi with a 39 percent gain in deliveries to 1.88 million cars, IHS data shows.

Audi used to showcase its models at Frankfurt as part of VW's display, though broke with that tradition in 2011 when it spent over 10 million euros setting up its own pavilion.

Despite attracting huge crowds with its 2011 indoor track, Audi decided against rebuilding the project this year.

"What's important for us is to surprise our customers on every occasion," Neumann said.

(Editing by Mark Potter)

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