BMW has launched its largest SUV ever, entering one of the market’s most profitable segments, long dominated by Mercedes, Audi and Cadillac.
The German automaker will finally have a full-size SUV of its own when the BMW X7 arrives in showrooms in April.
With an extra row of seating and more elbow room than its bestselling mid-size X5 utility vehicle, the X7 will capitalize on a consumer preference for larger vehicles. U.S. sales of BMW’s crossovers and SUVs rose 21% last year, surpassing sedan sales for the first time ever.
“The question we always need to consider when introducing a new model is whether it will cannibalize sales from other models in the lineup or bring new conquest customers from Mercedes and other brands,” said Nina McFadden, product manager for the X7. “We are planning on seeing a lot of the latter.”
BMW says its newest SUV, which measures about 9 inches longer than the X5, will appeal mostly to families. Executives expect about 70% of customers to choose the 340-horsepower, $73,900 base model and the remainder to choose the more powerful V8 version, which makes 462 horsepower and starts at $92,600.
The second-row bench seat can be swapped for two captain’s chairs that lower seating capacity to six passengers.
In 2018, pickup trucks, SUVs, and crossovers comprised about 70% of U.S. vehicle sales. Automotive research firm AutoPacific estimates that SUVs alone will constitute 59% of the U.S. market by 2024. Premium luxury SUVs including the X7 are expected to rise 11% over the same period.
“This growth is notable for the reason that overall vehicle sales are forecast to decline in the coming years, but sales of these expensive luxury SUVs are expected to grow,” said Ed Kim, vice president of industry analysis at AutoPacific. “In the past, X5 was sufficient as BMW’s top SUV offering, but today, the rich are only getting richer–especially globally–and they have money to spend. Thus, a true flagship SUV is absolutely a good thing for BMW to have.”
BMW’s seven-seater will do battle with the Mercedes-Benz GLS, Audi Q7, Infiniti QX80, Lincoln Navigator, Land Rover Range Rover and short-wheelbase version of the Cadillac Escalade.
The SUV, which is assembled at BMW’s Spartanburg, S.C. plant, bears BMW’s largest-ever kidney grille and features a more muscular, upright stance than the signature low-slung profile that BMW’s smaller crossovers showcase.
Read more: fortune.com