BMW Unveils Its Futuristic Super Sedan -- Is This the New 9 Series?

BMW's Future Vision Luxury concept car is widely believed to be a preview of the 2016 BMW 9 Series, a new high-end sedan. Photo credit: BMW Group

How do you know that the global luxury-car market is booming?

Here's one way: When BMW (NASDAQOTH: BAMXF  ) doesn't think its big and opulent 7 Series sedans are big and opulent enough to serve as the top of its luxury-car lineup anymore.

BMW took the wraps off of the car you see above in Beijing on Sunday. Officially, it's just a concept, but it's widely believed to be a preview of an upcoming super-BMW sedan called the 9 Series.

It's new territory for the German luxury-car maker. BMW owns the Rolls-Royce brand, but it has never tried to move into this level of the market -- a step up from its already-expensive 7 Series -- with a BMW-brand sedan.

Why would it be planning to do so now?

Why does BMW want a 9 Series?
Because it could make a lot of money.

Luxury vehicles of all kinds have seen big sales growth since the recession, outpacing mainstream vehicle sales growth in many parts of the world -- including Europe, the U.S., and China. And the outlook continues to be bright.

A lot of that growth has happened at the lower end of the market. But there has also been growth at the high end, as newly wealthy people in places like China look for increasingly different, increasingly exclusive offerings. In recent years, Rolls-Royce and Bentley have rolled out lower-end (for them) models, trying to reach customers for whom a BMW 7 Series or a Mercedes-Benz S Class might not be... enough.

Naturally, BMW and Mercedes would like to hold on to those customers -- or at least, to create their own extra-premium models to try to bridge the gap (and collect the extra-premium profits).

BMW's concept car features an exceptionally plush interior. Photo credit: BMW

BMW surely has data suggesting that there's a good-sized market in that lofty neighborhood. And it knows full well that a model at that price tier could be a very profitable offering, at least on a per-sale basis.

How profitable? It's hard to say. Profit margins on specific vehicle models are closely guarded secrets, at BMW or at any other automaker.  But it's well known that profit margins on luxury vehicles are higher than those on mass-market cars -- and as you move further upmarket, those profits can get very big.

Consider this example from one of BMW's key rivals. Volkswagen Group  (NASDAQOTH: VLKAY  ) builds and sells vehicles under a bunch of different brands, but in terms of profits, its big three brands are VW, Audi, and Porsche. 

Last year, the VW brand sold 5,932,300 vehicles all around the world, and made about 2.9 billion euros in profits, or about 488 euros ($675) per vehicle sold. But Audi, which competes directly in BMW's league, made just over 3,400 euros (just over $4,700) per vehicle sold -- and Porsche, which is positioned further up-market, made almost 16,000 euros ($22,150) for every vehicle it sold.

So it's reasonable to think that BMW could price a 9 Series in a way that would deliver it substantial profits on each sale. 

So what is this thing?
For now it's just a concept, and it has a concept-car name: "BMW Future Vision Luxury". BMW's press release says that the Future Vision Luxury "furnishes a long-term outlook on the perception of modern luxury for the BMW brand."

That is to say, one stage beyond the 7 Series. The Future Vision Luxury concept is 280 millimeters (about 11 inches) longer than the longest version of the 7 Series, and even more opulent inside.

Super-strong carbon fiber allowed BMW to make the door openings extra wide. Photo credit: BMW Group

It looks like a very big, very well-appointed, very expensive BMW sedan.The interior features lots of wood and leather, but in light tones and relatively delicate arrangements, giving a feeling of spaciousness.

And it incorporates a lot of high technology. The seat frames and interior panels are made of carbon fiber, BMW says -- an exceptionally light and strong (and expensive) material.

It's so strong that BMW was able to incorporate the car's roof pillars into the front seat backs. That allowed BMW to make an extra-wide opening for the rear door, for easier access to the lavish back-seat area -- which includes its own touchscreen system.

A very plush back seat, for a very important market
Why so much emphasis on back-seat appointments? It's not because the 9 Series is designed for limo-service duty, it's because of the way cars like these are used in the Chinese market.

In China, luxury-car buyers (and sometimes, mainstream-car buyers) often hire drivers and ride in back. Automakers doing business in China have been putting increasing emphasis on rear-seat legroom and comfort. Those needs become even more important in high-end cars like this one.

But as I said, this isn't limited to the vehicles we think of as luxury cars. Ford (NYSE: F  ) didn't need to change much when it turned the American-market Escape SUV into the Chinese-market Kuga SUV, but one key change it did make was to alter the seat structures to give back-seat passengers more legroom. (They got nicer leather, too.) 

Rear-seat comfort and amenities will be especially important with a car like the upcoming BMW 9 Series, at least in China -- and customers in Europe and the U.S. are unlikely to object.

The 9 Series is coming -- and it will have competition
Several years ago, Daimler (NASDAQOTH: DDAIF  ) tried to enter this market with a brand called Maybach that was slotted above its vaunted Mercedes-Benz brand.

The Maybachs were gorgeous, huge, and extremely expensive sedans -- but the name didn't resonate with buyers, and Daimler shut it down after a few years. But it's coming back, this time as a super version of Mercedes' top-of-the-line S-Class sedans.

Daimler is widely expected to show the Mercedes-Benz S600 Maybach this fall, at the Guangzhou and Los Angeles shows. Analysts think that a production version of BMW's 9 Series is likely to follow, sometime next year.

What do you think? Can the world's luxury market support a new class of BMWs and Mercedes that could cost well over $200,000? Or is this a step too far? Scroll down to leave a comment with your thoughts.

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Read/Post Comments (6) | Recommend This Article (12)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 26, 2014, at 8:12 PM, tonybudz wrote:

    The inside looks tight but the outside looks like they borrowed a few curves from Jaguar.

  • Report this Comment On April 26, 2014, at 8:25 PM, chniefwiley wrote:

    They need to move up-market. Hyundai and Kia are now building large luxury cars at the bottom to middle of their range that will siphon off buyers who want to save money. BMW and the others need those high end buyers who are willing to pay the higher prices just to establish that they can.

  • Report this Comment On April 27, 2014, at 12:27 AM, LungsOfSteel wrote:

    @chniefwiley:

    Hyundai hardly has BMW scared, and they are never going to make a big impact on true luxury brands without their own luxury brand a la Lexus.

  • Report this Comment On April 27, 2014, at 1:30 AM, aWintersTale wrote:

    Nice lines. But leave the running boards to the trucks.

  • Report this Comment On April 27, 2014, at 9:08 AM, jimboeerfan wrote:

    If it's anything like the 7 series, it will cost you 25,000 a year or more to fix all the bugs and maintenance problems. And it will sell for 1/10th of the asking price once it's 5 years old.

  • Report this Comment On April 27, 2014, at 1:58 PM, nonobaddog wrote:

    Or perhaps, it's BMW's way of attempting to correct the horrible mistake the latest 7 series is.

    Even Consumer Reports comments or the terrible

    plodding handling of the new 7. I have owned multiple BMW's over the last 25 years, and now own one of the previous model 7's and they are true to BMW's dna. The new 7 is not. In road tests Audi and even Jaguar have outhandled and outperformed the latest 7, which now drives more like an expensive Toyota than a true BMW. If things don't change my next new large automoble purchase may will be an Audi. BMW must redesign the latest 7, before producing an even larger and likely even more ponderous vehicle, like '9' will be. What's happened to BMW's "Ultimate Driving Machine"? As far as I am concerned, you could just attach a 48" mower blade beneath the latest 7 and now have the "Ultimate Mowing Machine"..

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