Guess the lower residuals, higher MF and no MSD are having an impact…
Hopefully they’ll be encouraged to increase residuals and decrease MF.
I turned my BMW lease in last month and was asking the sales manager about this issue. He said they are pretty frustrated with all of this coming from BMW, because they can’t do a lot of leases. This is coming from a dealership that has a reputation for really high prices, and they can’t even rise to the level of an “ok” deal with these new developments. BMW has to do something though. I turned in a 335i sedan with a residual of $35,000 that can’t be worth more than $30,000.
@anon98469396, they are doing something about the high residual lease returns, hence to declining numbers.
Yes, that was my point. That’s why I said the had to do something. They can’t continue to lose thousands on cars that are returned after the lease.
BMW can afford an 11% decline if they end up making enough more on each car they do sell. I think the math was no longer working on the “lease 'em cheap and CPO them” strategy. It is, however, tough on the dealers when BMWNA turns off the easy money spigot.
I think for the foreseeable future there will be no lease deals on BMW’s unless you find a leftover car where there is brand new version coming out or you luck into a dealer that needs to move a few more cars end of the month.
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Provided they adjust production or else there will just be a lot of excess inventory… May be worth it to see what I can buy come year end…
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Does the sales decline have to do with the refundable deposits going away also??? It caused me to abandon my idea of a 3-series…
They already have pretty tight control on the X series cars built in the US. Where they might be overstocked will be on the cars coming in from elsewhere. If they have to take cars then you might start to see inventories go up. I think they probably figured in some drop in sales. Question is whether they predicted a big enough drop, especially since sedan sales in general are tanking compared to crossovers.
There are always opportunities for deals. Its just that BMW is not handing them out like candy at Halloween like they used to.
BMW may not suffer on new vehicle sales but the leases will continue to fall off a cliff absent new subsidies. There are 3 reasons: (1) Competition, Mercedes wants the sales title and hasn’t reduced its incentives, and Toyota is getting aggressive (and also hurting) (2) Overall sedan sales are tanking as posted elsewhere and (3) The lease monthly payment and/or down payment aka cap cost reduction is too high so customers will not bother to walk in showroom.
The way you get suckers in the door to lease cars they can’t otherwise afford is to advertise low monthly payments with nothing down. The only way to do that is to: (1) reduce MSRP (not gonna happen as it would take profit from actual sales) (2) Raise residuals (3) lower money factor (we seem headed in the other direction and FED won’t be helping) or (4) discount.
Personally I am betting we will see 2 or 4 by the end of the summer, if not sooner. But as I like to say with other industries, the early bird gets the worm and it may be too late. I personally would lease one today if I could get 20% off but nobody is banging down my door. They’ve gotten a bit too spoiled and I’m ready to double down on Benz
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Lost in this headline was this fact in the article:
An exception to BMW’s underperformance in the passenger car realm is the BMW 5 Series. The new 5 Series sedan experienced a sales increase of 12.7% in May, with a total of 3,677 units sold.
Since the 5 series is their bread and butter luxury sedan, they are not going to be waving the white flag soon.
The 3 series will be the one needing repositioning away from the 50k MSRP mark and the 7 series is probably going to also be start coming down to earth
5 series is new for this year, hence the increase. The 3 is much more BMW’s bread and butter, as it’s sold/leased at a more attainable price. And even more to the point, it was the last car that still had a little bit left of what BMW used to be (although that’s now gotten watered down).
You think BMW’s going to reduce the cost of the 3 series away from 50k??? I don’t see that happening… ever. They’re more likely to decrease production of the 3 and increase the X-whatevers that people love. Crossover craze is amazing to me, but I’m a car guy so what do I know.
BMW world wide sales are up for the year, so as a company they are up for 2017. It’s just US sales that are down.