BMW, Audi and Volvo are among the automakers trying to boost U.S. sales to offset weakness in Europe and China. BMW is looking to make a supersized sport-utility vehicle specifically for the U.S., it told investors in Munich this week. Volvo Cars has said it would introduce a larger SUV in the U.S. as part of a major portfolio revamp. And Audi recently launched the Q9, its first full-size SUV, on the roof of a New York hotel.
"Americans love big SUVs. So why don’t we listen to that?" Volvo Cars Chief Executive Håkan Samuelsson said in an interview. European automakers are hungry for growth after a sales collapse in China triggered by falling home prices and digitally savvy local competitors. China used to account for as much as half of profit for companies such as BMW, Mercedes-Benz and Audi owner Volkswagen.
As profit from China has dried up, the U.S. has taken on outsize importance. Big SUVs are a particularly attractive niche to grow into because they carry higher margins. “Typically in the auto industry, the bigger the vehicle, the bigger the profits,” said Tyson Jominy, a senior vice president at data provider J.D. Power. Detroit dominates the big-SUV category today, including luxury models.
Audi’s new Q9 is around 209 inches long, approaching the dimensions of the Cadillac Escalade (about 212 inches). While the $87,700 standard Q9 is powered by a three-liter V6 engine, a special $118,000 “SQ9” aimed even more squarely at North America uses a four-liter V8. Audi, which doesn’ have a U.S. factory, is making the Q9 in Slovakia. Deliveries start in November.
Source: Wall Street Journal US Business · Summarized by HeadlinesBriefing