The BMW E39 5 Series – A Car That Changed The Automotive World Forever

It’s 1996 and you’re sitting in your living room watching the Olympics. During a commercial break, BMW’s award winning commercial for their redesigned BMW 5 Series shows the streets of New York City flooded with water, but most notably boats floating up and down city streets with the E39 540i navigating its way trough maritime traffic. It’s possible that at this point in time, the viewers who saw this commercial that summer had no idea of the ramifications the 5 Series would have on the automotive industry, while also ushering in an era of European luxury cars dominating the market.

Before dissecting this commercial and then fast forwarding to the present day, 1996 was a year of transition for the American auto market. Japanese manufacturers like Toyota and Honda are continuing to grab market share away from Ford, GM, and Chrysler due to their cheaper and practical cars, which is creating a seismic shift in consumer behavior as even in the mid 90’s, Americans were still loyal to auto manufacturers based in Detroit. As history tells us 20 years later, this transition will continue at a rapid pace leading to Toyota and Honda becoming prominent brands in the US Market.

It’s in this same year that BMW, Mercedes Benz, and Porsche unleash two seater convertibles: the Z3, SLK Class, and the Boxster. The Z3, already receiving notoriety after being featured in the James Bond movie “GoldenEye”, arrives at BMW showrooms shortly after the release of the movie. The Porsche Boxster will soon play a significant role in the German brand’s emergence in the US, and is just one of the few surprises Porsche is going to release within the next 10 years. The Mercedes Benz SLK is often the forgotten one out of the three, mostly due to the Z3 getting the spotlight, but also by the new millennium the redesigned SL is going to take center stage, overshadowing the SLK’s existence.

However, there’s still one segment Ford and GM own with a tight grip, and that’s the luxury sedan market. Lincoln, Mercury, Cadillac, Oldsmobile, and Chrysler (to an extent) are the old giants that stand in the way, and BMW is ready to accept the challenge with their E39 5 Series.

Back to analyzing the commercial, the boats signify the American luxury cars of the day. We can joke about the modern day Challenger being a boat, but the Lincoln Town Car and Continental, Mercury Grand Marquis, Cadillac Deville and Fleetwood were all bigger cars with boxy exteriors. Seeing the BMW weave through traffic with ease was meant to show it’s maneuverability, and not be a huge car that couldn’t get out of its own way. The last statement made in that commercial was, “Why float through life, when you can drive?”. This would resonate with younger consumers who really had a limited selection of luxury cars to choose from, especially if they didn’t want to drive cars their grandparents and aging parents owned.

The E39 540i/M5 wasn’t just a four door performance car that even today we marvel at, but the E39 in general was a luxury sedan that would reshape the automotive industry forever. In 1996, Mercedes Benz and Audi hadn’t found their way yet, but they too would be emboldened to compete with BMW by the end of the decade. This would then lead us to almost 18 years of competition between the German brands, which eventually dragged Jaguar, Maserati, and Volvo into the mix by 2014. But I’m getting way ahead of myself.

The 540i that was shown in that commercial was priced at $50k, but the 5 Series in 1996 had a base price of around $38k which was right in line with American luxury sedans. While the US economy was very different 22 years ago, the slow progression to European luxury cars dominating the market can easily be attributed to the E39 5 Series, and it was the beginning of bigger and better vehicles from Germany that would continue to put nails in the coffin of American automotive giants that ruled for over 60 years.

BMW E39 540i
BMW E39 540i

Too often we look at the E39 from a performance aspect, and some believe that the Chevrolet SS is the only car since 1996 that most resembles the E39 5 Series. However, when it comes to defining a luxury sedan, that’s where BMW reshaped an entire segment. Luxury cars in the 90’s were boats, much like their predecessors before them. While cars were slowly downsizing, the E39 accelerated the change by not only being smaller than a Lincoln or Cadillac, but also being sporty. If we walk into dealership showrooms today, luxury cars come with optional sports appearance packages and engines putting out impressive horsepower numbers. It wouldn’t be a stretch to go back 20 years and attribute that to the 540i.

Indirectly, the success of the 5 Series kickstarted the beginning of an arms race between the German auto manufacturers which then got the rest of Europe involved by the late 2000’s to early 2010’s. Mercedes Benz and Audi started producing sleek cars to compete against BMW, Jaguar then replaces the S-Type with the XF and later the XE enters showrooms, Maserati releases the Ghibli, Alfa Romeo reemerges in the US with the Giulia, and now under the ownership of Geely, Volvo is ready to be a legitimate threat to German manufacturers with a very impressive redesigned S60.

Jaguar, Maserati, Alfa Romeo, and Volvo were really niche brands, and even today they still are to an extent. I’m not going to downplay the effect crossovers have had on these brands, which is a story for another day as BMW and Mercedes Benz could be the patriarchs of a luxury SUV craze that swept through an entire industry with the X5 and ML Class hitting the market in 1998-1999. However, the E39 has certainly played a role, whether directly or indirectly, in the decision to produce four door sports cars that also have luxury car qualities, and the Audi B9 S4 is the perfect example of that.

At the end of the day, no matter which car you want to pinpoint as the culprit for the modern day four door luxury sedan, the E39 5 Series challenged the status quo, making luxury cool for younger consumers and not just a vehicle for aging Americans 65 and older. The performance side of the 540i/M5 certainly helped grab attention from drivers who wanted an exhilarating and engaging driving experience. This car’s massive impact on the automotive industry shouldn’t be overlooked, and as car enthusiasts who now have a variety of luxury sports sedans to choose from, we owe that to the E39 5 Series.

Auto Sales Get Decimated In October – A Sign Of Things To Come?

The month of October was not friendly to most car manufacturers, as overall sales in the United States dropped 6%. This sharp drop can be attributed to volume sellers who saw declines that haven’t been posted in quite sometime. Is this a reason for concern moving forward? Is a slowing auto market going to be the new reality that manufacturers will face for at least the short term? New car sales have been slowing over the past few months, but October’s sudden drop in overall sales is nothing that should be taken lightly.

It should be noted that October of 2016 had two fewer selling days than October of 2015, but with some of the percentages that were posted, not even two extra selling days could change the outcome of a bleak new car market.

Fiat-Chrysler Massacre

It has not been a good year for the Fiat-Chrysler group, and October magnifies the downward trend in sales for most of the brands. Chrysler posted a decline of 44.7%, Fiat down 24.3%, Dodge -16.4%, and Jeep -6.6%. Three out of the four brands listed are down on the year for new car sales, while Jeep is still maintaining an increase of 9.7%. With Dodge ending the Dart and Chrysler no longer producing the 200, sales figures being down was to be expected, but for the auto group as a whole, there’s not much excitement for any of the brands, besides Dodge which produces the Challenger and Charger.

BMW, Volkswagen, Volvo and Land Rover Experience Sales Decline

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Volvo and Land Rover, two manufacturers who are both up on the year in new car sales in the United States, saw sharp declines in the month of October. Volvo, a brand that has been revived thanks to the all new S90 and completely redesigned XC90, experienced a 14.6% drop in sales. Land Rover saw a decline of 23.2% in October. Despite the sharp drop in sales in the United States, Volvo and Land Rover are still having a fantastic year overall, and shouldn’t be too concerned about the final quarter of the year, unless lower sales figures overall in the automotive market becomes a trend.

BMW may be the biggest surprise for lower volumes in sales, not only for October, but for the year of 2016. Down 18.4% last month, and down 9% for the year, BMW is the only brand out of the big three luxury manufacturers in Germany that has experienced declines. Mercedes Benz and Audi are still strong, and while sales were flat in October, the loss of two sales days could be a contributing factor. Volkswagen on the other hand has not recovered from Diesel Gate, and with a loss of 13.5% on the year and another double-digit loss last month, it just continues to get worse for the German auto brand.

Bentley, Jaguar, Maserati, and Porsche Have Strong October

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Not everyone is reeling from the October blues, there are car brands that had a fantastic month with Bentley, Jaguar, Maserati, and Porsche having double and even triple digit increases in sales. The British are leading the way and Jaguar’s 226% sales increase can be attributed to the F-Pace and XE, which have both taken their respective markets by storm. The F-Pace is Jaguar’s first attempt at making an SUV, and so far it has been a great success, while the XE, which is the British’s answer to the BMW 3 Series, is seeing strong sales since it’s arrival to the market earlier this year.

Bentley’s impressive gain of 158% in sales last month is all thanks to the Benteyga, which is Bentley’s first ever SUV. In October, the Benteyga contributed more than 33% of sales for the Bentley brand. While the British luxury car maker is down on the year by 6.8%, the entrance into the luxury SUV market has yielded strong sales figures, with the Benteyga making up about 50% of Bentley’s sales in the US since it’s debut on the market in August.

Maserati, much like Bentley and Jaguar, has seen strong sales numbers since entering the SUV market as well. The Levante, which also brought in about 33% of sales in October for Maserati, has received raved reviewed by journalists and consumers. Maserati has hit a home run with their luxury SUV, and that is starting to trickle down to other cars in the lineup. The Ghibli had a strong month alongside the Levante, leading to Maserati’s 11.8% increase in sales for the month of October.

Porsche had the best month out of all German brands in October, with luxury SUV’s again being the main contributor for strong sale. Up 10.7% in October and 3.2% for the year of 2016, Porsche has seen tremendous sales figures and it’s the Cayenne and Macan that is carrying the once sports car dominated lineup.

Strong sales across the board for luxury brands could be a good sign, despite the slowing of overall sales in the market. While Fiat-Chrysler, BMW, Volvo, and many others struggled in October, there’s no reason to panic just yet. If the fourth quarter of 2016 continues a downward trend and that transitions into the new year, then there would be a legitimate reason for concern. As for right now, we can only hope that October isn’t the start of a trend, and that the holiday season and the incentives that come with it could motivate consumers to buy in November and December.

The Boston Car Scene: Where Does it Rank?

With YouTube and Instagram being the catalyst for car scenes across the United States in the 21st Century, car culture has always been considered more prominent in California, Texas, and Florida. Due to our inability to have year round events in the Boston area with our harsh winters and very unpredictable spring and fall months, the summer is really the only time of year we can take our cars out with full confidence that rain will not cancel events. With that being said, where does the Boston car scene rank, and is it underestimated and overlooked to some degree in the car world?

As a Bostonian and having seen the transformation this city has gone through over the past decade, car culture and its relevance in the automotive world is directly linked to our local economy. Over the past few years Boston has attracted business leaders and entrepreneurs, which in turn has brought some very rare exotics to the streets of our historical city.

This year a Pagani Zonda S showed up to Tutto Italiano at Larz Anderson Auto Museum, which is the largest event for Italian cars in the Northeast. Also present was a Ferrari Enzo that drew a crowd immediately when it pulled in. Herb Chambers Lamborghini of Boston held a get-together for Lamborghini owners prior to the event, and when all 18 cars including four Aventador SVs showed up, the entire park and the spectators there flocked to see them park on the lawn to meet their Alfa Romeo counterparts.

It’s not just Italian exotics that have become more of a common sight in and around the city. 2016 has been the year of the Porsche GT3 and GT3 RS. At Cars & Coffee, you can fully expect to see at least 2 of each to show up, and on some occasions even more. With the addition of a McLaren dealership 20 miles south of Boston, and the Aston Martin dealership in the western suburbs, the British car market has increased in popularity as well.

Boston’s car scene may never grow to the size of Florida’s, California’s, or Texas’, but it’s one that deserves a lot of respect. Car events have become fun for many who attend, and with the sightings of Aventador SVs, McLaren 650s, newer Ferraris, and even a Pagani Zonda S, the car community has gained a lot of traction, which is now introducing a new generation of car lovers to brands such as Audi, Mercedes Benz, and BMW, which has a very strong and loyal following.

Bigger and better things are sure to come, especially with the growth that the community has experienced over the past year. Hopefully with the growing number of car photographers constantly posting on Instagram, Boston’s car culture will bring further awareness to car lovers in New England who are looking to be a part of something big, that Texas, California, and Florida has monopolized.

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Porsche Commercial: Creating A Connection

What lacks from most automotive advertisements is emotion, passion, and a connection between the driver-to-be and the car. Vehicles are often more than just objects to people. For some, cars are a means of transportation, going from one destination to another, but for others, vehicles are a way of life. Some of you may ask, “How can there be such a relationship where the driver is completely engaged with the car?” Certain brands have built and engineered cars that make the driver feel as if they’re one with the car they own, and feeling very connected to the road through the twists and turns on a back country road. These machines grasp the imagination and excitement of drivers and kids of all ages.

Porsche’s commercial, presumably from 2005, pulls at the heartstrings of car enthusiasts. At one point or another in a person’s life, they looked out the window daydreaming of the sports car they’d own when they got older. No doubt that the Porsche 911 was on a poster in kids’ bedrooms, as even today, the 911 is an exotic car many only dream of owning. In a commercial that is primarily music with very limited dialogue, the kid is drawn in by the Porsche’s presence as it passes his school. He’s so captivated that immediately after school he rides his bike to the nearest Porsche dealership just to get a close up look at the new 911.

When he’s allowed to sit in the cabin, his emotions can easily be felt by the viewers. Even today as adults, we space out when we finally get to touch the car that’s been at the center of our dreams for years, or for one split second, we see ourselves driving it. Porsche’s commercial hits all the right notes that no doubt motivated people to buy the car immediately, or work harder to obtain their aspirations of owning a 911.

While there are a few funny moments when the kid asks for the salesman’s business card, or when he says he’ll see him again in 20 years, it still ties into the message, which is the connection to the car itself. Emotion and feeling are often the greatest motivators in life, yet car commercials of today don’t express what the consumer is feeling. Instead, it’s marketing the features of the car, or the add-ons that can be seen on most models in 2016, that’s taken precedence over what the consumer desires.

Owning a car should be fun, especially when consumers buy exactly what they wanted. A Porsche 911 is the car that enthusiasts want because it hugs the road, offers performance and luxury, and gives the owner many years of smiles and memories. These feelings haven’t died as some have suggested, including the Washington Post which had an article saying car culture is shrinking in the United States. Enthusiasts beg to differ as car shows and events are growing at a rapid rate across the country. Car enthusiasm isn’t dying, it’s being awoken.

Luxury car manufacturers are experiencing high volumes in sales, and for those who aren’t, it’s time to start reviving the emotion, joy, and excitement that once drew customers toward the brand. Instead of trying to be funny, or marketing your cars for what they aren’t, be real. Consumers are human beings with emotions, and their buying decisions are made through those emotions. Start appealing to the younger generations, get them excited for the vehicles you offer.

By not bringing your cars to life, you become like every other high volume seller. Bring back the emotion and appeal that has a lasting impact on consumers, and you’ll begin to see a loyal following that will continue to buy from your brand. Only then will you find the voice that speaks up amongst the rest on YouTube, Facebook, Twitter, and Instagram.

Volvo Dealerships, Listen Up

In the month of April, Volvo was outsold by Porsche in the United States, 5,217 cars to 4,636 sold by the Swedish automaker. This is very alarming, especially since Porsche’s prices are higher than Volvo’s, and also their vehicles were once rarer. What happened? It wasn’t too long ago, 8 years ago in fact, that Volvo’s yearly sales were in the six figure range. In 2014, the annual sales were at 56,366, which was a 5,000 car drop from the previous year. Volvo is heading into a very dangerous time, and you could say that the new XC90 will keep the company afloat until the major lineup changes take affect in 2017, but I don’t think you can wait another two years before sales figures could, and I stress could, rebound.

Mercedes Benz, Audi, and BMW are in contention for the number one spot, steamrolling over any car brand that even tries to compete with the German luxury car market. But the fact that Volvo was outsold by Porsche is a major concern, and here’s why. The Porsche Macan, Cayenne, and Panamera made up a huge portion of sales in the month April, which means they’re successfully selling their four-door vehicles. The bulk of Volvo’s sales came from the XC60 and S60, with the V60 and V60 CC chipping in with a combined total of just over 700. Now that we’ve seen what’s working for both automakers, it’s time to look at how Volvo dealerships can help improve car sales for the brand. Yes, you the dealerships can play a major role in your car brand’s overall sales.

I’ve had the pleasure of being inside the Volvo S60, and quite honestly, it was enjoyable to drive and sit in. Comfortable interior, and being the owner of an S40, I didn’t feel like I was in a drastically different car, which I liked. With 240 horsepower for the base model, that competes with and beats some of the German competitors in terms of power. You’ve got to let the consumer know that. Brand perception is still holding strong with the “It’s a family man’s car” or “For the Middle-aged adult”. I was at the car show in Boston this past January and there were more than just families in the Volvo section. Twenty-five year olds were surrounding the S60 Polestar, and they didn’t just sit and stare at it, they read the description next to it. There was a genuine interest.

Looking at the various lease options for the S60 from a number of local Volvo dealerships, the S60 is also cheaper to lease monthly than the Audi A3 and A4, Mercedes Benz CLA, and C-Class, and in some cases even cheaper than the BMW 320i X-drive. The S60 beats the competition, not only in power but also price. You have to make that known to the customer, and by advertising and posting content on social media, you can help spread the awareness.

The XC60 seems to be your best seller, and for good reason. But very rarely do I see Volvo dealerships making the XC60 a main focal point on social media. I know that the XC60 is due for a platform change that should happen in 2017, along with the S60/V60, but with a two year buffer, you have to continue pushing the crossover SUV. Porsche is clearly beating you to the punch, and consumers are willing to pay extra if need be to get a luxury crossover or SUV.

The V60 is another car that I don’t see being pushed much on social media, or even in other forms of advertising for that matter. The V60 Cross Country almost outsold the XC70, while also being 87 cars behind the V60 variant. In terms of luxury the V60 is one step higher than Subaru, and again, Volvo isn’t playing this up to their advantage. The V60 CC could have seen stronger sales, especially after the winter we experienced here in the Northeast. But again, Volvo dealerships missed a golden opportunity to promote their off-road capable station wagon.

Lastly, with the XC90 being the most iconic car for this generation of Volvo’s, it’s been somewhat disappointing to see dealerships not emphasizing the importance of this car, while also building up excitement for its release. Right now dealerships are doing the best they can, but hopefully with the new XC90 hitting showrooms, Volvo dealerships will give customers an inside look of their cars, whether that be at local events, or on social media.

Social media is vital to your car brand’s success. You have to utilize Facebook and Instagram. I see the passion for Volvo’s by current owners. They need a reason to go back to the dealership and consider trading in their old Volvo for a new one. The new Volvo’s are absolutely beautiful and I find them to be a dark horse in its market. You have to bring them to light, and make consumers aware of the better options your car company can provide.

#SaveTheManuals: A Valiant Effort All For Not

The age of the manual transmission is coming to a close. With automatics dominating the auto market, auto-shift and paddle shifters replacing the traditional manual, hard core car enthusiasts will have to either buy an older car or hope an auto manufacturer specifically targets to a dwindling market. As of right now, manuals make up about 6-10% market share, leaving the other 90-94% to being automatics or non traditional manuals that allow the driver to switch from manual to automatic when he/she so chooses. Last month, Acura announced that the only car in their lineup that will have a manual transition will be the ILX, which hasn’t generated great sales for the Honda-owned car brand.

When Ferrari, Lamborghini, and McLaren have paddle shifters on their models, you know we’re entering into a new era of cars. People have given many reasons as to why this phenomenon is happening. Some say it’s because the infotainment systems in cars require too much attention from the driver, so manually shifting become a second thought. Others say it’s because automatics have become just as fuel efficient as manuals, and due to the computer systems in cars now, the car can shift just as good, if not better than a human. But I personally believe that automatics are more convenient. Isn’t that where our culture is heading? Convenience?

A 16 year old who is learning how to drive, or just got his/her license can just get behind the wheel, put the key in the ignition, and drive off to their destination. There is no energy required, no secondary action needed while driving, and with the cars that are being produced today, a person driving an automatic can fully enjoy their vehicle just the same as owners of manuals.

Let’s also remember that auto manufacturers are companies. They’re following the money, and that trail does not lead to a large market for manuals. Six to ten percent isn’t a huge chunk of the market. In the last 35 years, we’ve seen a 25% drop in demand for the traditional manual, which means less money is going to that market. For these companies to survive they need to follow the money. This is the same reason that every car brand is entering the crossover market. Porsche manufacturing two SUV’s and a four door, and Ford bringing the Focus RS to America to compete with the likes of the Subaru STI and the Volkswagen GTI, is another example of car brands getting into a market that is making money.

We’re seeing a massive change and shift in the automotive world. Because of these changes, transmissions, infotainment systems, and other components have been updated to appeal to a broader market. Unless consumers start buying manuals, the days of the traditional stick shift will be over. It’s been a valiant effort, but it might be all for not.

Are Sports Cars Becoming A Thing Of The Past?

Er hat bestimmt eine tolle Klimaanlage.
ingrid eulenfan / Foter / CC BY-NC-SA

As we’re heading into the fifteenth year of the new millennium, the automotive world has changed quite a bit from twenty years ago. Sedans have more powerful engines, which means more horsepower, smaller SUV’s and crossovers can be found in almost every car manufacturer lineup, and technology in both the engine and the interiors of vehicles have now taken precedence over power. When it comes to the traditional sports car, is their time coming to and end? BMW’s Sales Chief Ian Robertson thinks so.

“The sports car market is roughly half of what it used to be,” Robertson told Bloomberg. “Post-2008, it just collapsed—I’m not so sure it’ll ever fully recover.”

To keep his comment in context, he’s not referring to the exotic luxury sports car market that includes Ferrari and other premium brands. Two-door coupes in general have been waning, and to take their place, sedans which used to be seen as for the average adult, now have sports packages that certainly would make a consumer question the long term value of buying a coupe.

Two-door coupes really aren’t that practical for families, or young adults who want to drive their friends around town. There’s less carrying capacity for both people and groceries which could definitely be a hassle if you’re moving into a dorm or shop frequently. Looking at how the automotive world has evolved over the past decade there are certainly better options out there for the average consumer.

Hatchbacks and sedans today offer everything the car enthusiast and everyday driver wants from a car. Cargo space, seating capacity, and more importantly stronger engines with more horsepower. While some would say sports car have a better center of gravity and can take turns better, how important is that to people who just want to get from Point A to Point B?

Sports cars have been on the downward trend. However, while the sports car market is slowing down for automakers, Ford, GM, and Dodge have re-introduced the muscle car to the American driver. Ford’s new Mustang that has the body style of the 1960’s, Dodge’s Charger and Challenger Hellcats that pack a whopping 707 horses, and Chevy’s Camaro are all grabbing the attention of sports car drivers. But other than the Americans, many car companies have turned their focus to serving the consumer who wants a four-door.

Even Porsche has slightly strayed from their identity as they’ve come out with to SUV’s and the four-door Panamera. Volkswagen is discontinuing their Eos, Volvo stopped producing the C30 and C70, Mazda has no plans to remake an RX-8, Chrysler is putting more focus on the 200 sedan rather than the coupe which they do offer, BMW is adding a four door to their 4series, and Audi has released sketches of a four-door TT. The trend in the automotive market is moving towards sedans and SUV’s, and whether that has anything to do with the fact that they’re more practical, or manual transmissions (which are usually found on sports cars) are becoming a thing of the past, we can’t lie to ourselves and think that Ian Robertson is wrong.

As I said before, he wasn’t saying anything about the exotic sports car market which is seeing strong sales numbers; he’s referring to the market that BMW is in. Consumers want smaller four-door cars, and that’s what we’re seeing car companies building. While Ian Robertson might be right about the sports car market, the four-door sedans of today have that sports car identity built in them that makes the Dodge Charger, Chrysler 200S, Audi S4, and the Lexus IS-F very popular cars.