BMW continues to spend industry-leading levels of money to lure luxury car buyers in the United States. Yet November was the twelfth consecutive month in which sales at the BMW Group declined, year-over-year, in the U.S..
Through the first 11 months of 2016, sales at BMW are down 10 percent compared with the same period in 2015; Mini volume is off 11 percent.
According to TrueCar, however, no automaker is spending more in incentives, on a per vehicle basis, than BMW of North America. November 2016 incentives at the BMW Group jumped 25 percent compared with November 2015 yet sales fell 16 percent.
How much cash on the hood do American luxury car buyers want?
TrueCar says BMW’s incentive spend rose to $6,279 per vehicle in November 2016. No other major automaker’s incentive spend rose above $4,700 per vehicle last month.
Granted, BMW’s per-vehicle incentive spend was down in November, albeit slightly, compared with the previous month of October.
But November was still the tenth consecutive month in which BMW incentivized with more dollars per vehicle than any other automaker. And even when BMW’s higher prices are taken into account, only Kia (13.2 percent) and Nissan/Infiniti (15.8 percent) top the BMW Group (12.6 percent) in terms of incentive spending as a percentage of the average transaction price.
Across the lineups at both BMW and Mini, sales are in decline. Passenger car volume at BMW is down 21 percent, not only because of 3 Series/4 Series sales that have tumbled by nearly 34,000 units compared with the first 11 months of 2015, but also because of a 5 Series that’s down 26 percent (and about to be replaced), a 46-percent dive in 6 Series sales, a 29-percent i3 downturn, and a 29-percent Z4 drop.
Mini’s vast car lineup — two and four-door Hardtop, Convertible, top-selling Clubman — recorded a 12-percent decline through 2016’s first 11 months despite the addition of more than 10,000 Clubman sales. Together with the Countryman (down 19 percent) approaching replacement and the Paceman disappearing, total Mini volume is down by more than 6,100 units in 2016. That places Mini on a track for its worst annual U.S. volume since 2011.
BMW’s sports-activity vehicles tell a different story. Although X4, X5, and X6 sales are collectively down 14 percent, surging X1 and X3 sales propelled the BMW utility vehicle division to a 13 percent increase so far this year.
Supply remains quite tight, however. Automotive News says BMW ended November with only 39 days of SAV supply, indicating a real lack of vehicles available for sale. The industry light truck average is 70 days.
Entering December, always the highest-volume month of the year for BMW, there are only 20,000 X1s, X3s, X4s, X5s, and X6s in stock.
In other words, customers are growing increasingly uninterested in the BMWs that BMW dealers have, no matter how steeply they’re discounted, while there aren’t enough of the BMWs that BMWs customers want.
These are not good problems to have. If BMW doesn’t turn the ship around with a startlingly strong December, sales in 2016 will fall to a four-year annual low even as overall industry pace toward record levels.