BMW is contemplating introducing a compact car, smaller than any previous model, to the North American market. This follows Mercedes-Benz’s earlier entry into the small car segment, a strategy both automakers have long employed in Europe. The question is whether this move will dilute BMW’s prestigious brand or expand its market reach.
Automakers invest heavily in shaping consumer perception. BMW and Mercedes-Benz, like Cadillac, cultivate an image of luxury. However, past attempts by luxury brands to market smaller, less expensive cars in America have been met with mixed success. Cadillac’s Cimarron, a rebadged Chevrolet Cavalier, failed to resonate with consumers and damaged the brand’s reputation. The Catera, while slightly larger, also suffered from being perceived as a reworked Opel.
The upcoming overhaul of the BMW 1 Series presents a similar dilemma. While currently a sport hatchback, a sedan version is reportedly being considered for the U.S. market due to American preferences. Examining the current 1 Series reveals a resemblance to a stretched Volkswagen Golf with BMW’s signature front fascia. It offers a range of engines, including 1.6L and 2.0L I4 gasoline engines, a 24V 3.0L V6, and a fuel-efficient 2.0L four-cylinder diesel. Prices start under $25,000.
Equipped with standard BMW features like ABS and luxury appointments, the 1 Series is not a stripped-down model. BMW must proceed cautiously. Ditching the hatchback in favor of a sedan, wagon, or coupe could be a smart move. Unlike the basic Mercedes models, the 1 Series has the potential to succeed in the U.S. Alternatively, BMW could consider launching a separate brand to preserve the BMW mystique.