Posted: 03 Sep 2012 12:30 PM PDT
BMWBLOG had the opportunity to interview Gordon McDonnell, Accessory & Lifestyle Manager BMWNA, and Eric Riehle, M Performance Parts Manager. The main topic of our discussion revolved around the new M Performance Parts catalog and BMW’s offerings for North American customers.
BMWBLOG: Who is the target audience for the M Performance Parts?
Gordon McDonnell: In general BMW is a balance between luxury and performance, performance sedan, coupe and also luxury. It’s an opportunity for customers who really want to accentuate the performance nature of the car. There’s clearly no targeted demographic or age group; it’s really across the board for people who want to take the performance of their BMW to another level and accentuate the performance.
BMWBLOG: What do you believe it’s the main focus of M Performance parts? Would it be to improve aesthetics or to improve performance?
Gordon McDonnell: Here in the U.S. we’ve always positioned it to improve performance. Now with the name changing from the BMW Performance to M Performance we have to do the M-brand adjustment, to position the parts around performance. From a sales standpoint, although we do sell quite a bit of the performance oriented parts, we do sell a ton of the aesthetics parts. We realize that not all customers will take their car fully towards the performance direction, so we’ll offer aesthetics as well, but will be positioned around the performance nature of these parts.
BMWBLOG: Would you say that most of the customers are repetitive BMW customers or you see a lot of first time BMW owners?
Gordon McDonnell: First time and repeat owners. But I would say the enthusiasts are the stronger or the larger part of that group.
BMWBLOG: Have the M Performance Parts sales met your expectations?
Gordon McDonnell: Yes, I would say we’re very clean towards the growth and we just about double sales every year, since we introduced the Performance line, so it’s been a good, solid growth for us, it’s a segment that we’ve always had watched for a long time and wanted to get into. The U.S. actually pushed our German colleagues to offer these parts and always told them that this is a segment that we had to be in. That kind of growth of business would expand our portfolio, and I think we’re pretty pleased with and I’m very happy to say that even compared to our OEM competitors out there, I think we do a quite good job and have really grown that quite an expensive portfolio compared to some of the others out there.
BMWBLOG: On your website you list both Performance Parts and Motorsport Parts. What’s the difference between these two?
Gordon McDonnell: BMW Performance or M Performance now, as the name has changed – are parts for consumer vehicles, for street cars. They allow their customers to retain their warranties, their design has been tested and approved by our BMW engineers, and designed to work with the production cars.
The Motorsport parts are purely off-road racing parts. Right now the parts we offer on the Motorsport side are generally the parts that are used for the customer parts that they sell in Europe. They obviously race several FIA-spec cars and we can use some of the parts here for brand racing and not a lot of them translate into sales, but it’s something that in the future we love to grow that size of business as well even to the point where we could have a customer car and be able to sell parts through a customer racing program.
BMWBLOG: Why would a customer modify a BMW with M Performance parts versus buying a new BMW M Performance car?
Gordon McDonnell: The M Performance car will slot underneath the M car, but will be above the M Sport package. The M Sport package is basically a suspension upgrades, wheel upgrades and the styling of course. The M Performance car has a higher performance engine as well, so it’s something the customer is offered as a package they can also buy for somebody’s car as an accessory. For the M Performance cars we fully plan to offer additional accessories, maybe exhaust system for the cars that don’t have exhaust, carbon fiber diffuser, mirror caps or interior components, to dress up the car further. Then we’ll be able to take it even further. But also the components allow someone who already has a car to accessorize the car, tune it into an M Performance car, and it also allows them to do it piece-by-piece as well. Project-wise it is someone who thought that M performance was out of their range ranged, they could buy a 335i and as they want it piece-by-piece to accessorize it with our Performance parts.
BMWBLOG: Do you have any plans to offer any M Performance parts that could improve the steering feedback in cars with EPS?
Gordon McDonnell: No at this point, but it is an interesting concept, because we modify the software for the engine and actually it is a kind of the next step: you’ve already modified the engine, so what’s next? It’s the electronic suspension. It would be an interesting concept to look at. Currently we don’t have any plans to do anything, but as the cars are more computerized and electronics, it’s definitely the next opportunity to adjust.
BMWBLOG: Do you still plan to keep your arrangement with Steve Dinan through the dealerships?
Gordon McDonnell: Our relationship with Steve Dinan is strictly on the engine building-side for the Grand-AM racing program. He does sell his parts through some of our dealerships; essentially through the part-dealing side of our dealerships there’s no connection there. Basically Steve will step in and cover BMW’s warranty – customize the problem with his car and we deem it not to be defect for BMW. If it was a failure of a part that he had, he’ll cover it. We have the 4-year / 50,000 miles, so there is no official agreement between the companies there. It’s just him stepping in and saying: “Hey, if the part is not covered by BMW, I will cover the 4-year / 50,000 miles warranty?” We have a partnership with him on the Motorsport side and obviously he still builds engines for the racing team for the Grand-AM.
BMWBLOG: You mentioned earlier about OEMs and aftermarket tuners. How do you plan to compete with some of those that sometimes offer either the same performance at the same price or even lower?
Gordon McDonnell: What one of the things we offer that they can’t is warranty, and it was something that we saw extremely positive for us especially with MINI Performance parts. With the change to M Performance, we bring the M brand, which is something that the aftermarket can’t use. Obviously the engineers have worked on the car, it’s still quite the same company, it’s designed for the car, and we are able to stand behind it with the 4-year / 50,000 miles warranty on both the MINI and BMW side. That kind of piece of mind is really giving us an advantage.
We know there will be aftermarket companies that can offer more horsepower, and cheaper as well, but we know that the modifications we have made to the car are safe and within the mechanical limits of the car since we tested and created the car as well as emissions – we have emission requirements, we have to meet noise requirements so the car is still completely legal, compliant and fully warranted, and regardless of where you purchase the car, or where you service the car, our BMW dealers will take care of that customer. In my opinion that provides us quite a competitive advantage and no one can’t discount the power of M.
Another advantage to buy our parts is that some of the parts also carry the residual price. If you lease the car, then that BMW is worth more when you return it, which is something the aftermarket cannot compete with.
BMWBLOG: Speaking of the design, do you believe that the M Performance parts have an influence on the initial design of the BMW cars? Will the brand build something softer so that they can add those parts on top of it to make it more aggressive?
Gordon McDonnell: I don’t believe the designers actually soften the car up, so they can sell something more aggressive. I do believe that when the car is developed and tested obviously they have a range they go through and test. And they have to come up with that compromise between luxury and performance, the handling and the performance that will appeal to the general audience of BMW. And after they have done all that testing, and they’ve probably done it under the limits and over the limits, once they’ve reached that kind of balance between the two, for the customer who wants to accentuate that sporty nature and take their car more in the direction of performance, then they can open the door and hand us the parts.
Eric Riehle: One specific point here is the suspension. When they designed the F30 3 Series, they built different suspension characteristics, one for the standard setup, one of the M Sport package and they will have the one for the M car which clearly can be too aggressive for the average customer. So the M Performance suspensions are geared towards the more sport-oriented customer
BMWBLOG: Are there any M Performance parts that are specific to the US market?
Gordon McDonnell: There is one part: the exhaust system. In Europe they have much stricter standards, when it comes to CO2 levels. So they do obviously have the performance exhaust system in Europe, but ours are at different specs. And actually that’s one of our best-selling car parts – the performance exhaust.
BMWBLOG: Currently you’re offering a power kit for the 335i. Do you plan on offering one for the 328i as well?
Gordon McDonnell: There is potential for other investigation at this moment, but I can’t confirm anything at this point. If you take a look at the sales of our M Performance parts, you will also see that the demand has really has been on the top model 335i, let’s say for the 3 Series, and then our M vehicles. And it’s something in talking with Steve Dinan or Will Turner, and some of the other tuners or aftermarket people, we learned that people with the top engines in the model range or the M cars are the ones who are really looking for performance parts to make the car quicker.
BMWBLOG: Would you say that the 3 Series is the family of cars that have the most M Performance parts sold?
Gordon McDonnell: Yes, and that would be not only from the positioning of the car but also from the sheer volume. That is the highest selling car that we have, and also the positioning of our cars is perfect for the parts.
BMWBLOG: What are the top 3 parts that are being sold for the F30 3 Series?
Gordon McDonnell: For 3 Series: the exhaust, carbon fiber components, and there’s been a very positive feedback on the M Performance brakes for the F30. We sold quite a few of them with the colored calipers. And just from a volume standpoint, everybody loves the black kidney grille.
We have a “port installation program” now, where we have the dealers have the accessories installed on their cars, so the cars arrive at the dealerships ready for delivery, and Eric Riehle has added all the BMW Performance Parts to that program.
But talking about the black kidney grille, that is something that we’ve seen in very high volume through that program, as some dealers basically have been adding them a lot to their 335i or 135i models. Even on the stock orders, they’ve been just putting them on the cars, including the carbon fiber spoilers.
BMWBLOG: Are the M Performance parts available for E90/E92 customers ?
Gordon McDonnell: Those parts will still exist with the BMW Performance team, but as those models move out, everything introduced new will be M Performance. The E90 will be the first car to go out of production with the BMW Performance name. Then E82/E88 1 Series, and then there’ll be the E70/E71, because don’t forget we also offer performance parts also for these cars. Those cars will be in production for a couple more years, so they will be the last parts to carry the BMW Performance Parts product name. After these, everything new coming on the market will be M Performance.
BMWBLOG: Do you have any plans to offer a more aggressive tune kit for the M3? That’s probably one of the BMW model that everyone is going after, and OEMs and consumers are trying to increase the level of aggressiveness.
Gordon McDonnell: This is an area where we totally agree with you and we are pushing for. The position of BMW AG right now is that the M car should be at the top. And although the requests we’ve seen and the parts that we sell are to customers with the top models, we would love to offer an extended range of accessories for the M vehicles, especially the M3. As you know we didn’t get the special models, like the GTS, yet we would have loved to offer performance parts for the M3. In the mean time, basically BMW M should be at the top of performance, but it’s something that you would have to definitely be interested in and pushing for.
Eric Riehle: There are still a lot of things in the background though, homologation and production costs.
BMWBLOG: The BMW 135is Coupe is coming out and is usually one of these cars that speak to enthusiasts. Are you planning anything specific for this model?
Gordon McDonnell: We already have components that will work specifically for that model, for example the suspension, then we have all the carbon fiber components that you can add to that vehicle. We still have some parts that you can add from the catalog, but nothing specifically.
BMWBLOG: If you’re looking to compete with BMW tuners on the market, why would BMW discontinue parts, like the kit from E46 suspension?
Gordon McDonnell: For us, all the E46 performance components were discontinued temporarily, due to lack of sales. So here you have a car that’s out of warranty, maybe the customer is more price sensitive, and there’s a lot more options out there for it. So it’s an area really where we try, we offer several parts, but we were as competitive as we wanted to be and didn’t see sales.
BMWBLOG: Is there any restriction on the warranty?
Gordon McDonnell: No. What we do with any of the accessories – and M performance Parts are included in these – is if you buy the part over the counter, there’s basically a two year unlimited warranty for the part. But if you buy it and have it installed at your BMW center, the part carries the same warranty as the vehicle, so it would be the 4-years / 50,000miles, or 2-year unlimited, whichever is greater. So we fully stand behind those parts for the period of time the car has warranty.
Eric Riehle: I just want to add the fact that they’re also covered through the maintenance program. For example if you buy the air intake, the air filter will be covered. If you purchase the upgraded brakes, then the brake pads are covered. So there is additional benefit.
As a closing point, we would like to mention the fact that we launched the M Performance parts for the 3 Series and the 5 Series, that was considered the first wave. Now we have a second wave of parts, which will be coming out later this year, probably October-November timeframe. There will be a lot of aerodynamic parts, specifically for the cars with the M Sport package. For example rocker panels, rear diffuser, so we have a lot of parts coming up in the future.