How BMW manipulates used car sales...

[paris1]

Ever wonder why sales of a given model BMW (in this case, the Z4) can shoot up one month (40% increase in Dec. 2015) and drop like a stone the next (51% decrease in Jan. 2016)? Well it's because the factory is "spiking" the market with discounted vehicles for dealer loaner fleets and the manufacturer can claim otherwise unjustified sales volume at year end. And it's also why the big dealers always have a lot of sub-10k mile cars for sale used. Just does wonders for BMW residual values! Read all about it here:
http://www.bloomberg.com/news/articl...to-buy-loaners

[CedarZ4]

This is nothing new, and if I'm not mistaken, not restricted to BMW either. This is why all the loaners you ever see are super low mileage. After a few months, they are sold as CPO vehicles and a new vehicle is purchased from BMW to serve as a loaner, serving as a sale. This is not necessarily a bad thing for consumers... we get new loaners and those who are interested in purchasing low mileage CPO'ed loaners have the option to.

[Tangent]

It's kind of sad that such a huge spike is still such a small number for the Z4.

US sales for the Z4:

November 2015 - 81
December 2015 - 253
January 2016 - 42

I was at a BMW dealership a few weeks ago and did notice a surprising number of Z4s on their lot. Usually I see 1 or 2, but this time they must have had 10 sitting there. Considering there are 339 dealers that the average of 152 sales per month (based on 2015 sales) are distributed between that's a pretty big inventory. Granted I'm in Southern California which likely sells much more than average, but still...

[paris1]

Originally Posted by CedarZ4

This is nothing new, and if I'm not mistaken, not restricted to BMW either. This is why all the loaners you ever see are super low mileage. After a few months, they are sold as CPO vehicles and a new vehicle is purchased from BMW to serve as a loaner, serving as a sale. This is not necessarily a bad thing for consumers... we get new loaners and those who are interested in purchasing low mileage CPO'ed loaners have the option to.

I didn't say (nor does the article) that these practices are anything new or reserved to BMW. But for the unenlightened, this could be an eye opener. The business model high end German manufacturers use to bring these cars to market is largely a product of ridiculously high German labor costs. I can't help believe that if these cars retailed for the $35k-$50k they're actually worth, there would be much less incentive to stuff the pipeline like this. It's a wonder anyone makes any money in this game!

[Zyal8r]

Originally Posted by paris1

. But for the unenlightened, this could be an eye opener. The business model high end German manufacturers use to bring these cars to market is largely a product of ridiculously high German labor costs. I can't help believe that if these cars retailed for the $35k-$50k they're actually worth, there would be much less incentive to stuff the pipeline like this. It's a wonder anyone makes any money in this game!

It reminds me of the demise of the early English sports car. The UK was unable to produce and bring good competitive cars to the market. The cars were exquisite(E Jag, Austin Healy, MGA etc.) but the quality was hopeless and only a few survived.
German Cars are better but Euro regulations and costs are taking a toll. The result is the known issues and class action lawsuits and the famous VW cheating. Bmw is selling a lot of Xsuvs and bravely trying o penetrate every feasible segment for higher volume. Porsche is very profitable but they are having to go to smaller engines with twin turbos for efficiency almost across the board and they have engine issues as well. Germany is committed to solar and wind and so energy costs are the highest of any country in the West. Cars are made from energy in various forms. I could go on but i just hope it doesn't end up like the UK in the 60s and 70s.

[paris1]

Originally Posted by Zyal8r

It reminds me of the demise of the early English sports car. The UK was unable to produce and bring good competitive cars to the market. The cars were exquisite(E Jag, Austin Healy, MGA etc.) but the quality was hopeless and only a few survived.
German Cars are better but Euro regulations and costs are taking a toll. The result is the known issues and class action lawsuits and the famous VW cheating. Bmw is selling a lot of Xsuvs and bravely trying o penetrate every feasible segment for higher volume. Porsche is very profitable but they are having to go to smaller engines with twin turbos for efficiency almost across the board and they have engine issues as well. Germany is committed to solar and wind and so energy costs are the highest of any country in the West. Cars are made from energy in various forms. I could go on but i just hope it doesn't end up like the UK in the 60s and 70s.

...or that the US follows them down the same slippery slope!