BMW is set to enter the off-road market with a new model designed to compete directly with the iconic Mercedes-Benz G-Wagen. According to a report by Automotive News, this upcoming vehicle, codenamed G74, is expected to be produced at BMW’s factory in Spartanburg, South Carolina, with production slated for 2029.
The G74 will be based on the existing BMW X5 SUV, and while it will not aim to be a mass-market vehicle, it will serve as a flagship model similar to the performance-focused XM SUV. This strategic move allows BMW to tap into a lucrative segment, given the high transaction prices associated with the G-Wagen.
The G74 will face competition not only from the G-Wagen but also from the L663 Land Rover Defender, which has adopted car-like unibody construction akin to the X5, and the Ineos Grenadier, a body-on-frame off-roader powered by BMW technology. The G74 is anticipated to replace the plug-in hybrid XM, which is expected to cease production in November 2028.
While details regarding the powertrain remain undisclosed, BMW has achieved notable success in transitioning to electric power. In 2024, the brand set a sales record in Australia, with one-third of its sales comprising electric vehicles. In contrast, a Mercedes-Benz executive recently criticized the battery-electric G-Wagen, launched in Australia in June 2025, describing it as a commercial failure due to slow sales.
“The car is sitting like lead at dealers; it’s a complete flop,” the anonymous executive told the German business newspaper Handelsblatt. This situation may make BMW cautious about fully committing to electric power for the G74. Instead, it may opt for hybrid technology, similar to the plug-in hybrid V8 powertrain found in the XM. The company has indicated its intention to continue utilizing internal combustion engines for high-end models, including the latest PHEV V8 G90/G99 BMW M5 sedan and wagon, providing a potential rival to the V8-powered Mercedes-AMG G-Wagen.
Although BMW has established credibility in the high-performance SUV market, it lacks the same legacy in off-road vehicles where Mercedes-Benz has been a leader since 1979 with the G-Wagen. Utilizing the next-generation X5 underpinnings will give the G74 dimensions comparable to the G-Wagen, which measures 4,873mm in length, 1,984mm in width, and 1,979mm in height, with a ground clearance of 282mm. This size offers greater potential for off-road capability compared to the larger BMW X7.
Over the years, BMW has offered X5 models equipped with an xOffroad package featuring air suspension and locking differentials, but it has yet to produce an SUV as rugged as the G-Wagen. As BMW gears up for the G74’s debut, the automotive landscape is poised for a new chapter in off-road luxury.
