Tesla is intimidating to all brands, however, of the luxury brands it seems that BMW is more vulnerable than others. The Model 3 was just the start with many BMW owners swapping their BMW for Tesla. With the introduction of the Y, that could go further to X BMW SUV owners or those cross-shopping the brand.
Interestingly, a little over a year ago, Bloomberg did a survey of Tesla Model 3 owners across the US. One of the parts of the survey discussed what vehicles were traded in. Of course, the Prius topped the list, but interestingly, the 3-series was the second most traded in vehicle on the survey. The next luxury car on that list was the Audi A4, which shared the number nine spot with the Mazda 3.
Tesla’s Model 3 Success Hits BMW the Hardest
I definitely agree with Doug, traditional luxury automakers from BMW, to MB or Audi, are losing desirability. While older clients may stick with the brand and have created loyal relationships, like Doug says the brands also have to appeal to newer and younger clients, as well as create a brand loyal relationship. Anyone can get new buyers, however getting them to stay is the tricky part. The advantage Tesla has is their experience is unlike any other. While a BMW, Mercedes, or Audi owner could get a similar experience to their car from the competitors of the three brands, the Tesla experience is unmatched, and not just because its an EV. Their customer satisfaction and loyalty is through the roof in numerous surveys even with the many negative aspects their brand has such as build quality and customer service, something that would usually prevent a brand from sales.
There was a time when Cadillac was the standard for luxury cars, they were on top of the world in the US, and then the Europeans came in and now they are top dog. There have been cars and/or brands which have held top spots for years, only for the competition, changes in consumer taste, or their own brand decisions to hurt them in the long run (Taurus, Camry, Cadillac, etc.) Things can always change, with new competitors challenging how things were done. It takes time, but the future is a big question mark for all brands with how drastically the car industry will be changing in the next decade. These regulations of no ICE cars by 2035 may have the possibility of killing off or severely damage certain brands. No one knows what the future may hold.
