Ten years after the global financial crisis forced it to scrap plans for its biggest-ever SUV model, BMW AG (BMWYY) is finally unveiling the three-row luxury cruiser at the Frankfurt Auto Show next week.
BMW plans to utilize plump margins from the new monster SUV to cushion its bottom line and fund its foray into electric vehicles. If current plans continue to take shape, designing BMW's forthcoming iNext battery-powered self-driving model will take years to pay off. That's where the new X7 comes in.
BMW's X7 will go on sale next year and compete for market share with the General Motors Co.'s (GM) - Get Report Cadillac Escalade, Toyota Motor Co.'s (TM) - Get Report Lexus LX and Daimler AG's (DDAIF) Mercedes-Benz GLS. The X7 will boast BMW's signature kidney-shaped vertical front grille and narrow headlights.
Selling its biggest SUV model ever in order to fund greener next-generation vehicles seems counterintuitive for BMW, but the company said the X7 can be built with a plug-in hybrid powertrain that lets the SUV drive emissions-free for short trips.
BMW originally laid out plans for an SUV of this style about 10 years ago, but rising oil prices during the financial crisis drove car buyers to smaller models that used less gas. But in recent years, drivers have shifted significantly toward larger crossovers and SUVs instead of sedans.
This week, BMW announced plans for 25 electrified vehicles to be unveiled by 2025. To fund the green-car shift in focus, BMW is relying on an increase in sales and revenue from the X7, along with other luxury models including the 8-Series coupe.
The X7 will be built stateside in a Spartanburg, South Carolina, plant. The first prototype of the model will be shown at the Frankfurt International Auto Show next week.
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