An equally serious challenge is being posed by new entrants, such as Genesis, the luxury brand recently spun off by Korea’s Hyundai. Its first entry into the compact sports sedan segment has generated intense buzz, the G70 winning the coveted Motor Trend magazine Car of the Year award.
By hiring away former BMW executives including Albert Biermann, now its R&D chief, as well as executives from Bentley, Bugatti, Mercedes and Lamborghini, Hyundai’s luxury brand has been able to “build a legitimate 3 Series competitor,” Motor Trend declared in awarding the G70 its trophy.
The reality is that Genesis G70 sales have been marginal so far, but there’s an even bigger threat coming from California now that Tesla appears to have finally resolved the “production hell” problems at its battery and assembly plants. The all-electric Model 3 has also taken aim at BMW’s “heart and soul” and is rapidly leaving the 3 Series in the dust, at least from a sales perspective. It delivered around 18,000 of the compact sport sedans last month, according to industry estimates, compared with 3,218 3 Series.
The BMW numbers may be a bit misleading, as demand typically dips ahead of the launch of a new model. Sales for the 3 Series fell 47.9 percent year over year in November. But even using year-earlier figures, the Model 3 would have outsold the 3 Series by nearly 3 to 1.
There’s an even bigger challenge, said analyst McElroy. “People are drifting away from sedans to SUVs and CUVs, so the biggest competitor may be the product on the other side of the BMW showroom.”
Indeed, in sharp contrast to the declining demand for the 3 Series, BMW’s compact crossover utility vehicle, the X3, posted a 77 percent year-over-year sales jump last month, while year-to-date demand is up 45.1 percent.
And it’s not just the 3 Series that has seen sales upended. BMW passenger car sales, on the hole, were down 2.5 percent in the U.S. through the end of November. The brand’s crossover lineup — or sport activity vehicles, as it prefers to call them — rose 10.8 percent year over year.
BMW officials contend that their goal isn’t to make the 3 Series the best-selling compact sport sedan in the industry, just the one that sets the benchmark for performance and handling. It may not be number one, but it’s the model that continues to define the brand, whatever model you’re talking about, sedan, coupe, wagon, sports car or sport utility vehicle.
And from the standpoint of the initial reviews, that’s where the new 2019 BMW 3-Series is truly delivering.