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Part of the strategy involves meeting the competition at established set-points. In the case of the 340i, it has the Audi S4/S5 clearly in its sights. The 3-level marketing strategy of Audi (A,S,RS) can be effectively countered by BMW's broader range of engines. As per C&D's latest comparo, the soft spot for BMW is the 335 vs. the S4, because the 335 lacks a real performance variant (ZMP is show without beef).
I have been surprised at how slow BMW is to respond to, what for me seemed obvious, future contingencies. Why not bring a 50+mpg 4 cyl to market in the US? Why not put some beef into the ZMP package to beat the S4 in that niche?
When you let the accountants call the shots, we get M SUVs.
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