BMW AG, already struggling to root a slide in sedan sales, will soon have another trouble on its hands: Elon Musk.
The German automaker has been ceding ground in the U.S. luxury market this year to rivals Mercedes-Benz and Audi, hamstrung by plunging demand for its top-selling model, the 3 Series. That entry-level luxury sedan segment is about to be challenged further by the long-awaited Model 3 that Tesla Inc. began handing over to employees last week.
While Musk has touted the Model 3 as more of a mass-market electric vehicle, the cost of the $35,000 base model is similar to the 3 Series, the Mercedes C-Class or the Audi A3. Adding options like the autopilot driver-assistance system and an extended battery scope can stretch the cost to $59,500, positioning the sedan securely in the luxury-car segment.
Tesla is” bringing people who could render enter luxury into the market ,” said Jessica Caldwell, an analyst with car-shopping website Edmunds.” Especially persons living in urban areas and perhaps don’t drive just as much or take modes of public transport, this is a automobile for even those people to be swayed into the auto marketplace, where perhaps the C-Class wasn’t really speaking to them .”
BMW’s 3 Series U.S. deliveries plummeted 40 percentage in July, make contributions to the brand’s 15 percent sales decline. Daimler AG’s Mercedes C-Class, which has significantly defied the trend of weak passenger-car marketings this year, succumbed to the demand stray in July, falling 22 percent. Total deliveries for Mercedes cars and light trucks slipped 9.2 percent.