BMW went on a mad rager last year as it did everything it possibly could to claim the U.S. luxury sales crown from Mercedes and Lexus — and now katzenjammer is in full effect.
The premium German brand is looking at piled-up stocks of cars sitting on dealer lots. Predictably, those dealers aren’t happy, and BMW is trying to inject some saline to recover.
According to Automotive News, BMW attributes the inventory glut to equities market volatility and low oil prices.
“Affluent customers generally ride out recessions OK, but specific market volatilities can directly affect the premium vehicle market, and that’s what we’re experiencing right now,” Alexander Bilgeri, spokesman for BMW North America, wrote in an email to AN.
The situation is made even worse thanks to BMW hunting down the sales crown and flooding dealers with inventory to take advantage of the strong U.S. dollar and a weakening Chinese market, though it doesn’t seem to be an issue specific to BMW.
From Automotive News:
AutoNation, the largest U.S. new-vehicle retailer, warned in early January that there was a bulging inventory of unsold cars, especially luxury models. Late last month, Group 1 said it planned to cut orders, particularly for luxury cars, and claimed BMW, Mercedes and Audi each had more than 90 days of supply at its stores.
When asked about the number of days supply or whether BMW was now suffering from the after-effects of trying to win the sales crown, spokespeople for BMW declined to comment.
Premium sales tanked in the first two months following 2015. Through the first one-sixth of 2016, U.S. sales of passenger cars sold by so-called premium brands plunged 17 percent.
BMW’s CFO says the company is committed to taking its medicine, and will reallocate future inventories to rid itself of its 2015 hangover.
“We are adjusting our production plans and reallocating more SUVs to the U.S.,” CFO Friedrich Eichiner said during a conference call with analysts last week.
BMW is currently offering moderate incentives on some 2016 models and much heavier incentives on leftover 2015 stocks.
[Image: © 2016 Alex L. Dykes/The Truth About Cars]