BUSINESS: GETTING A BEAT ON BMW

In the image-conscious luxury-car business, BMW has always been the car to beat. The Ultimate Driving Machine doesn't sell the best, but it laps the competition when it comes to cachet. Now, though, BMW is catching a little exhaust from two Japanese luxury lines that were once distant also-rans: Acura and Infiniti. Consumer Reports just slapped the $33,000 Acura TL on the cover of its annual auto issue, naming it the best upscale sedan on the road, nosing out the BMW 330i. And Car and Driver just judged the Infiniti G35 the No. 1 $35,000 sports sedan, also beating BMW. But it's not just the critics who are falling for the Japanese luxury duo's blend of high style and horsepower. Sales are up 27 percent at Acura and 18 percent at Infiniti this year, while BMW is down 2.3 percent. "I don't think I'll ever go back to a 3 Series," says L.A. Internet exec Seth Berkowitz, who traded in his Bimmer last month for an Acura TL.

Now that Acura and Infiniti have the buyers, they've got to prove they belong with the big boys. And that takes legit luxury cars at more rarefied prices. So at this week's New York Auto Show, Infiniti will take the wraps off its $45,000 M45 and Acura will unveil a redesigned version of its flagship RL sedan. Both automakers gave NEWSWEEK a sneak peek at their edgy new models. The M45 looks like a supersize G35, with a cigar-shaped nose and headlights that sweep back into the fenders. Under the hood is a steroidal 340-horsepower V-8. To Infiniti dealers the M45, which goes on sale next year, is critical. "If you can't sell a real car for over $40,000, you're not true luxury," says St. Louis Infiniti dealer John Capps. Acura is also pumping up the ponies in its new $45,000 RL, which packs a 300-plus-horsepower V-6. To keep all that power glued to the road, the RL will now come standard with all-wheel drive. Most important, the new RL continues Acura's turn away from blandmobiles to an edgier look suggesting... what else? "Imagewise, we're going in the direction of BMW," says Tom Elliott, executive VP of Honda, Acura's parent. Bimmer execs say they're flattered that Acura and Infiniti are gunning for them. But a new version of their best-selling 3 Series is still a year away--plenty of time to watch the competition in the rearview mirror.

BUSINESS: GETTING A BEAT ON BMW | News
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