BMW delays X3's U.S. launch to push custom orders

BMW is delaying the U.S. introduction of the redesigned X3 to launch a system designed to encourage buyers to custom-order the crossover to their specifications, says Jim O'Donnell, president of BMW of North America.

The delay could put the X3 in U.S. showrooms in mid-2011, up to six months after the U.S.-built X3 goes on sale in Europe. In the past, BMW launched American-built cars, such as the X5, in the United States before introducing them in Europe.

The move also will allow BMW to offer up to four engine variants at launch, making lower-priced versions available from the outset. Engines could include a four-cylinder gasoline and a diesel, O'Donnell says. BMW will decide by year end whether to offer a six- or four-cylinder diesel.

Normally, BMW would launch the X3 with the highest-priced six-cylinder engine. But in these recessionary times, the automaker didn't want to introduce a $50,000 X3 with only one engine, O'Donnell says.

The downside is that X3 sales will limp along because of increased competition. Through October, U.S. sales of the X3 fell 67 percent from a year earlier to 5,280 units. X3 sales reached a high of 34,604 in 2004.

The X3 is available only with all-wheel drive and starts at $39,575. The base-model, front-drive Mercedes-Benz GLK starts at $35,475. Both stickers include shipping.

Production of the X3 will shift from Magna Steyr in Austria to BMW's Spartanburg, S.C., factory, where an assembly hall is being constructed. The flexible plant allows customers to make changes to their orders up to five days before assembly begins.

Says O'Donnell: "Several years ago, we discussed this customer-ordering concept. It is very difficult to do if you are producing cars in Europe and shipping them here."

BMW probably will allow dealers to order vehicles for their stocks with the top 10 options customers want. If a customer wants any of the other features, a special order would have to be placed, O'Donnell says.

BMW will roll out the program to dealers next October. O'Donnell thinks customers who special-order tend to add several thousand dollars in options.

About 70 percent of the vehicles produced by the Spartanburg factory--the X5 and X6 crossovers--are customer orders, plant executives say, but very few are for the United States. If the X3 ordering system is a success, BMW plans to roll out a similar plan for the X5 and X6.

By Diana T. Kurylko- Automotive News