BMW Struggles to Pry Open New Markets
| MUNICH, GERMANY
ON a wall of his office at BMW headquarters, Henrich Heitmann has a map of central Europe stuck through with colored pins.
There are blue pins for this year's planned dealerships; green pins for next year's. The white pins are reserved for prospects in the Ukraine. Clear pins stand for 1995 possibilities. A clear pin sticks in the former Soviet city of Irkutsk, for example, not far from the Mongolian border.
If only the real situation were so neat.
"Don't think there are any statistics!" says Mr. Heitmann, BMW's European director. "Don't think you can make a marketing plan! All this is impression. You try to get an understanding of how many BMWs there are on the road. You move in the city for a couple of days."
Sometimes the hunches are right; sometimes they are not.
"When you see a country like Georgia, where you set up a dealership and the next day there's a civil war, it is simply very hard, day-to-day work," he says.
If Europeans once thought that the opening of Eastern Europe and the former Soviet Union would mean a marketing gold mine, their dream has quickly faded. Eastern Europe is not ready to become a major car market. And its prospects are "difficult to judge," says Klaus-Jurgen Melzner, auto analyst with Deutsche Bank Research.
Eastern Europe has plenty of people but little money. European automakers (Volkswagen, Fiat, and others) seem more intent on building cars there than selling them. "For some years to come, Eastern Europe will be a net exporter to Western Europe," Mr. Melzner says.
Prospects may brighten nearer the turn of the century.
"The most interesting market is certainly Poland," says Josef Gorgels, director in charge of European marketing for Mercedes-Benz AG. "The next one is probably Hungary, then Russia."
But these countries represent tiny markets. Mercedes currently sells about 2,500 cars a year in Poland. By the year 2000, the company's sales there might double, but that would only represent its current market volume in Portugal, a country the fraction of Poland's size.
"Catching up with a country like Belgium or Holland takes many, many years," Mr. Gorgels says.
So several companies are patiently trying to build markets for the long term. Six months ago, BMW opened a dealership in Alma-Ata, the capital of Kazakhstan. Sales have not boomed exactly. The dealer has sold about 50 cars. But the dealership also has a repair facility with four bays and a body shop to fix up old BMWs that ply the roads there.
For a place like Kazakhstan, a dealer-run repair shop is a new idea, Heitmann says. And he hopes there will be enough repair work to keep the dealer going until Kazakhs somehow find the money to buy new BMWs.